WASHINGTON, Dec. 20, 2016 /PRNewswire-USNewswire/ -- The National Reverse Mortgage Lenders Association reports today that homeowners aged 62 and older saw an overall 2.6 percent increase of $152.0 billion in senior home equity in the third quarter of the year, bringing the total to $6.1 trillion. The gains, largely driven by a 2.3 percent increase in senior home values, pushed the NRMLA/RiskSpan Reverse Mortgage Market Index (RMMI) up to 217.34, another all-time high since the quarterly index was first published in 2000.
"The upward trajectory of the RMMI tells us that housing wealth continues to provide senior homeowners with a financial resource they can use to support their needs during their retirement years when income is dependent on Social Security, investment assets, and pensions," said NRMLA President and CEO Peter Bell. "The positive trend is also reassuring for homeowners nearing retirement age who are less likely than their predecessors to leave the workplace with a defined benefit plan and also more likely to have long-term debt."
According to a recent report from Harvard's Joint Center for Housing Studies, only 29% of households on the cusp of retirement (aged 50-64) will leave the workforce with a traditional pension, compared to 49% of today's 65-and-older households. The authors also cite a study from the George Washington University School of Business showing 60 percent of pre-retirees (aged 51-61) have at least one source of long-term debt, and 26 percent have more than one source.
The combination of constraints raises serious concerns about the financial stability of future retirees and their ability to manage the costs of aging including long-term care. Among their policy recommendations for addressing the projected challenges, the authors of the JCHS report note that housing wealth can provide a valuable safety net for older households in need of additional financial resources.
For senior homeowners who want to learn more about converting a portion of their home equity into a liquid asset with a reverse mortgage loan, NRMLA has published three new guides available to download from our consumer education website reversemortgage.org. The free resources answer questions about the features and responsibilities of reverse mortgage loans, and explain the different stages of the loan process from pre-application to repayment:
- Reverse Mortgage Self-Evaluation: A Checklist of Key Considerations
- What You Need to Know About Your HECM After Closing
- What Do I Do When My Loan is Due?
2017 RMMI Expected Release Dates
Q4 2016 – March 21, 2017
Q1 2017 – June 20, 2017
Q2 2017 – September 26, 2017
Q3 2017 – December 19, 2017
About Reverse Mortgages
Reverse mortgages are available to homeowners age 62 and older with significant home equity. They are a safe financial tool seniors can use to borrow against the equity in their home without having to make monthly payments as with a traditional "forward" mortgage or a home equity loan. Under a reverse mortgage, funds are advanced to the borrower and interest accrues, but the outstanding balance is not due until the last borrower leaves the home, sells, or passes away.
To date, more than 1,006,570 senior households have utilized an FHA-insured reverse mortgage. More than 642,000 senior households are currently using a reverse mortgage to help meet their financial needs. For more information, please visit www.ReverseMortgage.org
About the National Reverse Mortgage Lenders Association
The National Reverse Mortgage Lenders Association (NRMLA) is the national voice for the industry and represents the lenders, loan servicers, credit unions, and housing counseling agencies responsible for more than 90 percent of reverse mortgage transactions in the United States. All NRMLA member companies commit themselves to a Code of Ethics & Professional Responsibility. Learn more at www.nrmlaonline.org.
Jenny Werwa, 202-939-1783, email@example.com
National Reverse Mortgage Lenders Association
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SOURCE National Reverse Mortgage Lenders Association