MReport May 2021

TheMReport — News and strategies for the evolving mortgage marketplace.

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44 | M REPORT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Senior Housing Wealth Surpasses Record $8 Trillion Mark Find out how much seniors' housing wealth increased between quarters last year, according to the latest Reverse Mortgage Market Index. A ccording to the latest NRMLA/RiskSpan Reverse Mortgage Market Index (RMMI), homeowners 62 and older saw their housing wealth grow by 3% or $234 billion in Q 4 of 2020, to a record $8.05 trillion over Q 3. The RMMI rose in Q 4 2020 to 289.44, another all-time high since the Index was first published in 2000. The increase in senior homeowner's wealth was mainly driven by an estimated 2.7% or $261 billion increase in senior home values, offset by a 1.5% or $27 billion increase in senior-held mortgage debt. Year over year, the RMMI increased by 8.3% in 2020, compared to 5.4% in 2019 and 6.3% in 2018, mainly driven by higher home price appreciation. The latest S&P CoreLogic Case- Shiller Indices from S&P Dow Jones found that for January 2021, home prices continued to increase across the United States, an 11.2% annual gain, up from 10.4% in December 2020. "Further declines in mortgage rates—which hit all-time lows at the end of December—helped carry the strong momentum, but also amplified demand from millennials and those seeking second homes," CoreLogic Deputy Chief Economist Selma Hepp said. "Additionally, housing inventories are not showing any signs of improvement. In fact, data shows they are reach- ing historical troughs, which is put- ting additional pressure on home prices. Recent pick-up in mortgage rates over the past few months may be reflected in slowed home price growth later this year." And with this historic low supply of homes, more and more seniors are deciding to stay at home rather than relocate. In the recent Post-2020 Retirement Survey conducted by American Advisors Group (AAG), 28% of seniors polled said they felt safer at home in 2020 than years prior, as lockdown and stay-in-place orders were mandated around the country due to the pandemic. With the increased time spent at home, most seniors polled indi- cated no desire to move, as 55% said they plan on living in their current home forever. "Most seniors still don't realize that their home could be the solu- tion for their financial needs and give them the peace of mind they are searching for," reported the AAG study. "While the survey shows that many seniors are plan- ning to work longer and look for alternative ways to increase cash flow, many could easily achieve a sustainable lifestyle by utilizing the home equity they have built over the years."

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