A reduction of 0.3% in home values and a slight increase in senior-held mortgage debt have led to the total amount of senior-held home equity dropping from its all-time high.
This is according to the latest edition of the Reverse Mortgage Market Index (RMMI), a quarterly report compiled by the National Reverse Mortgage Lenders Association (NRMLA) in conjunction with data analytics firm RiskSpan.
The new report states that senior-held equity peaked at a total of $14.09 trillion in the second quarter of 2024 but fell to $14.01 trillion in the third quarter, dropping the RMMI from 489.70 to 489.37.
“The decline in senior homeowner’s wealth was largely attributable to an estimated 0.3 percent (or $55 billion) decrease in home values and a one percent (or $22.6 billion) increase in senior-held mortgage debt,“ according to the report.
NRMLA President Steve Irwin said that January marks a time for older homeowners to assess how they will approach their financial affairs in the coming year.
“Housing wealth represents a critical, yet underutilized, resource that can provide greater financial security for America’s aging population,” Irwin said in a statement. “We encourage homeowners to at least consider tapping their home equity when creating a comprehensive retirement plan, because those funds can be used to pay for everything from daily living expenses to future long-term care needs.”
The RMMI data diverges from a recent estimate from Freddie Mac, which showed that home equity held by the baby boomer generation specifically could be as much as $17 trillion, or roughly half of all U.S. home equity.
The government-sponsored enterprise’s estimate was derived from Federal Reserve data, according to the report released in December.
While baby boomers own much of the nation’s housing wealth, a transfer to younger generations will occur over time, Freddie said in its report. Three-fourths of respondents to the accompanying survey — regardless of race or gender — said they will leave their current home or its sale proceeds to a family member after they die.
