WASHINGTON, Sept. 29, 2017 /PRNewswire-USNewswire/ -- The National Reverse Mortgage Lenders Association reports today that homeowners age 62 and older saw their home equity increase by a combined 2.4 percent to $6.42 trillion in the second quarter of 2017 from $6.27 trillion in Q1 2017.
According to the NRMLA/RiskSpan Reverse Mortgage Market Index, the growth in housing wealth for retirement-aged homeowners was driven by an estimated 2.1 percent, or $162 billion, improvement in senior home values, and offset by a 0.8 percent increase of senior-held mortgage debt that equaled $12 billion. The RMMI, a quarterly measurement of home equity held by older homeowners, rose to 230.17 in Q2 2017, another all-time high since the index was first published in 2000.
"It is unclear whether Congress and the President will come to an agreement on healthcare reform this year, but there is little doubt that healthcare spending per person will continue to increase. This is a particularly sobering fact for older Americans who can expect to spend between $200,000 to $400,000 out- of-pocket for medical expenses during retirement," said NRMLA President and CEO Peter Bell. "The question for them right now is not whether the Senate Majority Leader can get the votes to pass a bill, but how are they going to pay for the financial shocks of aging? Housing wealth provides older homeowners with an available source of funds to manage the costs of caregiving and other expenses incurred in the last third of life."
A 2015 research paper from the Ohio State University, Aging in Place: Analyzing the Use of Reverse Mortgages to Preserve Independent Living, shows that 14 percent of reverse mortgage borrowers took out the loan with the intention of using the proceeds to pay ongoing health or disability expenses. Visit NRMLA's consumer education website to read about a couple in Windhaven, Maine, who used reverse mortgage loan proceeds to pay off aging medical bills, help their adult son, and supplement retirement savings.
About Reverse Mortgages
Reverse mortgages are available to homeowners age 62 and older with significant home equity. They are a versatile financial tool seniors can use to borrow against the equity in their home without having to make monthly principal or interest 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, 1,035,486 households have utilized an FHA-insured 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, 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.
About RiskSpan, Inc.
RiskSpan offers end-to-end solutions for data management, risk management analytics, and visualization on a highly secure, fast, and fully scalable platform that has earned the trust of the industry's largest firms. Combining the strength of subject matter experts, quantitative analysts, and technologists, the RiskSpan platform integrates a range of data-sets–including both structured and unstructured–and off-the-shelf analytical tools to provide you with powerful insights and a competitive advantage. Learn more at www.riskspan.com.
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National Reverse Mortgage Lenders Association
SOURCE National Reverse Mortgage Lenders Association