The NRMLA/RiskSpan Reverse Mortgage Market Index (RMMI) rose in Q4 2014 by 1.5% to 186.78, its highest level since Q2 2007. The $59.1 billion increase in senior home equity in the fourth quarter was fueled by an estimated $61.3 billion increase in the aggregate value of senior housing, offset by a $2.2 billion increase in senior-held mortgage debt. The fourth quarter of 2014 was the eleventh consecutive quarter in which the index has risen, and the $3.90 trillion estimated aggregate value of home equity owned by seniors eligible for reverse mortgages is now just 3% below its peak level of $4.0 trillion in Q4 2006. The current senior equity levels represent a 32% recovery since the post-Recession trough reached in Q2 2011, when seniors equity levels had fallen to an estimated $3.0 trillion.
RiskSpan’s estimate of the value of senior-owned housing hit a new high of $4.98 trillion in Q4 2014, eclipsing the old peak achieved prior to the financial crisis.
The senior housing value estimate is based on the American Consumer Survey’s MSA-level estimates of the number of senior home-owners, census population projections, and FHFA’s Q4 2014 all-transactions Housing Price Indices, which showed quarter-over-quarter increases in housing values for 66% of the 412 MSAs covered by RiskSpan. The estimate of senior mortgage debt is based on the Federal Reserve’s Q4 2014 Z1 Flow of Funds Release and the 2010 Survey of Consumer Finance.
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