The NRMLA/RiskSpan Reverse Mortgage Market Index (RMMI) rose in Q2 2014 by 3.5% to 178.9, its highest level since Q4 2007. The $125.2 billion increase in senior home equity in the second quarter, driven by an estimated $125.5 billion increase in the aggregate value of senior housing and a slight $0.4 billion increase in mortgage debt held by seniors, was the largest quarterly increase in equity since Q3 2005. The second quarter of 2014 was the ninth consecutive quarter in which the index has risen, and the $3.73 trillion estimated aggregate value of home equity owned by seniors eligible for reverse mortgages is now just 7% below its peak level of $4.0 trillion in Q4 2006. The current levels represent a 26% recovery since the post-Recession trough reached in Q2 2011, when seniors equity levels had fallen to an estimated $3.0 trillion.
The senior housing value estimate is based on the FHFA’s Q2 2014 all-transactions Indices, which showed quarter-over-quarter increases in housing values for 83% of the 412 MSAs covered by RiskSpan. The strong HPI performance in part reflects the fact that these HPI indices are not seasonally adjusted for the traditionally strong spring and summer months of the second quarter.
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