April 09, 2019
On the Rise of Senior Homeowner Wealth
During the course of 2018, homeowners who qualify as seniors—for our purposes, those who fall in the age range of 62 or older—achieved a profound increase in housing wealth. Even despite the apparent signs that a mild recession may be in the offing, senior housing wealth has remained fairly steady—coming in as of the third financial quarter of the year at a total of $6.97 trillion. That’s a quarter-over-quarter increase of 1.4 percent (which, yes, comes in at lower than 2107’s 1.96 percent—but is still growth). The major engine behind this growth has been the rise in housing values at a rate of 1.3 percent since the previous quarter, which meant a $115 billion increase in overall housing value.
Not surprisingly, according to the RiskSpan Reverse Mortgage Market Index (RMMI) released in December by the National Reverse Mortgage Lenders Association, this growth in senior homeowner wealth has also resulted in an increase in the number of starts of reverse mortgages. Indeed, the third quarter RMMI rate rose to an all-time high (since the Index’s origination in 2000) of 251.57. (As of the same quarter last year, the rate stood at 233.12.) Reverse mortgages are available to homeowners 62 years of age and older who have managed to accrue significant equity, and allow the homeowner to benefit from the equity while remaining in their home. Interest does accrue on a reverse mortgage, but the balance on the home does not come due until the homeowner either moves away from the home (by vacating or selling it) or passes away. To this point over one million homeowners have taken advantage of the benefits offered by an FHA-insured version of such an arrangement.
The number of seniors owning homes is significant. Nearly 35 percent of seniors own a home, and with the latest economic developments there are signs that seniors are becoming less likely to try to upgrade from their present homes; instead they are choosing to stay put and renovate instead.
Title defects can occur with any property, no matter how long ago one apparently secured full ownership. We at Topouzis & Associates, P.C. are experts at ferreting these defects out and disposing with them in advance of closing. We take pride in the great amount and quality of experience we bring to the closing table in Rhode Island, Massachusetts, and Florida. Contact us if you want a partner in your property closing—one who makes everyone involved feel like family.