Tag Archives: equity

Housing Wealth for Older Homeowners Reaches $6.6 Trillion in Q4 2017

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Senior Home Equity Grew by $149 Billion in Fourth Quarter

Washington, D.C. – March 27, 2018 (PRNewswire-USNewswire) Housing wealth for homeowners 62 and older grew to $6.6 trillion in Q4 2017, an increase of $149 billion in senior home equity over Q3, reports the National Reverse Mortgage Lenders Association today in its quarterly release of the NRMLA/RiskSpan Reverse Mortgage Market Index.

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The RMMI rose to 238.11 in Q4, another all-time high since the index was first published in 2000. Driven by an estimated 2.0 percent, or $163 billion, increase in home values, gains in senior housing wealth were offset by a 0.9 percent, or $13.4 billion increase, in senior-held mortgage debt. On an annual basis, the RMMI increased by 8.3 percent in 2017, compared to an annual increase of 8.0 percent in 2016 and 8.5 percent in 2015.

“Today’s retirees are more likely to leave the workforce with a mortgage and other debts that can put stress on monthly cash flow,” said NRMLA President and CEO Peter Bell. “In these situations, financial products that convert home equity to cash could be used to pay off revolving debt from credit cards and reduce or defer monthly mortgage payments. It’s worth doing the math to find out if a mortgage refinance, home equity line of credit, or reverse mortgage loan can help increase financial security during retirement.”

Research from the Ohio State University shows that reverse mortgage borrowers often use loan proceeds to pay off an existing mortgage, and nearly a third use funds to pay down other debt, such as credit card balances or personal loans.

Real Estate Equity Infographic

On April 24, 2018 at 3:00 PM ET, NRMLA and Next Avenue, the public media website for America’s booming older population, will host a free webinar Q&A to answer consumer questions about using home equity to supplement retirement savings and support aging in place. Experts from Blue Ocean Global Wealth, Magnify Money, the National Council on Aging, and NRMLA’s Education Committee, will explain housing wealth and what the term home equity means, how it can be tapped, and situations when it may make sense to incorporate home equity into a retirement financial plan.

Registration details are available on NRMLA’s consumer education website reversemortgage.org.

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, 1,079,654 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.

Contact:

Jenny Werwa – National Reverse Mortgage Lenders Association
(202) 939-1783
jwerwa@dworbell.com

Owners of the Least Expensive Homes Gaining Wealth Faster Than Any Other Homeowner

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But tight inventory and strong demand for these homes make it difficult for buyers to enter the market

– Owners of starter homes have gained 44 percent in equity over the past five years, while owners of the most valuable homes have gained 27 percent over the same time period.

– Affordable homes in Tampa, Florida saw the greatest appreciation over the past year among the largest U.S. metros, gaining 20 percent in value.

– Seattle and the Bay Area are the only large markets where the most valuable homes are gaining value faster than affordable homes.

Seattle , WA – Feb. 16, 2018 (PRNewswire) Owners of starter homes across the country are gaining equity faster than other homeowners because demand for entry-level homes continues to grow faster than supply.

The phenomenon – which has become more pronounced over the past few years — underscores the power of homeownership to build wealth, particularly among the middle class.

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For this analysis, Zillow® divided the U.S. housing stock into equal thirds based on value and determined the median value of the most and least valuable homes. Over the past year, homes in the most affordable segment of the market, which are often sought after by first-time buyers, gained 8.5 percent in value, compared to a 3.6 percent gain for the most expensive homes. Over the past five years, the difference is even more noticeable — people who own starter homes have seen their equity grow by 44.4 percent, while owners of top-tier homes have gained 26.6 percent.

A home is the biggest financial asset and a significant share of net worth for many homeowners. Less affluent homeowners typically have more of their wealth in their homes than homeowners with a higher net worthi. Owners of more affordable homes are seeing their homes’ value, and therefore their overall wealth, grow rapidly.

“When the housing market crashed, owners of the least valuable homes were especially hard hit, and lost more home value than homeowners at the upper end of the market,” said Zillow senior economist Aaron Terrazas. “Since then, though, demand for less expensive, entry-level homes has built steadily, causing prices to grow rapidly. As a result, these homeowners have been able to build wealth at a faster pace than owners of more expensive homes.”

Strong home value appreciation among more affordable homes is beneficial for people who own those homes, but also makes it difficult for buyers trying to enter the market. Inventory among the most affordable homes is extremely limited, making for a highly competitive market going into home shopping season — there are nearly 18 percent fewer entry-level homes available now than a year ago.

Among the largest U.S. housing markets, owners of the cheapest homes in Tampa, Florida are seeing the greatest gains in home equity. Over the past year, these homes have gained 20.4 percent in value. Las Vegas homeowners are close behind. The most affordable homes there have appreciated 19.9 percent from last year.

San Francisco, Seattle and San Jose, California are the only large markets where the most expensive homes are gaining value faster than starter homes.

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Zillow

Zillow is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow’s Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Launched in 2006, Zillow is owned and operated by Zillow Group, Inc. (NASDAQ: Z and ZG), and headquartered in Seattle.

Zillow is a registered trademark of Zillow, Inc.

(i) https://www.zillow.com/research/black-hispanic-home-wealth-16753/