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October 21, 2019
Doctors: Senior Housing Wealth Reaches Record High
A new report shows that seniors are sitting on more housing equity than they ever have before.
According to the National Reverse Mortgage Lenders Association, overall senior housing wealth hit a record in the second quarter, $7.17 trillion.
Homeowners 62 and older also saw their housing wealth increase by 0.5% percent or $32 billion in the second quarter.
The data comes courtesy of the NRMLA/RiskSpan Reverse Mortgage Market Index, which was first released in 2000. According to the report, the RMMI also hit a record high in the second quarter, climbing to 258.44.
The report stated that the increase in senior homeownership wealth was caused by an approximately 0.5%, or $47 billion, increase in senior home values, which was offset by a 0.9%, or $14.6 billion, increase of senior-held mortgage debt.
“Many retired and soon-to be-retired Americans lack the financial assets for a comfortable retirement, yet the most commonly held and valuable asset for most of them is their home,” said NRMLA’s Executive Vice President Steve Irwin. “Responsible use of home equity may be the best option that ensures they have food, medicine and other basics for a comfortable retirement.”
Looking Ahead: Upcoming Key Market Dates
Purchases Decline, Refis Still Strong as Rates Show Mixed Results
Mortgage application volume eked out a slight gain during the week ended October 11 as interest rates became mixed. Purchasing weakened while the volume increase was again driven by refinancing activity.
The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of mortgage loan application volume, rose 0.5 percent on a seasonally adjusted basis from one week earlier and was 1 percent higher before adjustment. The Refinance Index gained 4 percent and was 199 percent higher than the same week in 2018. The refinance share of mortgage activity increased to 62.2 percent of total applications from 60.4 percent the previous week.
Both the seasonally adjusted and the unadjusted Purchase Indices dropped by 4 percent from their level during the week ended October 4. The unadjusted Index was 12 percent higher than it was a year earlier.
“The ongoing interest rate volatility is impacting a borrowers’ ability to lock in the lowest rate possible. Despite a slight rise in mortgage rates last week, refinance applications increased 4 percent and were 199 percent higher than a year ago,” said Joel Kan, Associate Vice President of Economic and Industry Forecasting. “Purchase applications slowed for the second week in a row. While near term economic uncertainty is still a factor, other fundamental issues, such as a lack of housing inventory in many markets, is preventing purchase activity from meaningfully rising. However, purchase applications were still much higher than a year ago. This is a reminder that the purchase environment in 2019 continues to be stronger than in 2018.”
The FHA share of total applications jumped 1 percentage point from a week earlier to 11.3 percent and the VA share of total applications rose to 12.9 percent from 12.3 percent. The USDA share slipped to 0.4 percent from 0.5 percent. The average size of a mortgage rose from $328,600 the previous week to $329,900 and purchase loan balances grew to $332,100 from $330,600.
Mortgage rates were mixed on both a contract and an effective basis.
MBA’s Weekly Mortgage Applications Survey been conducted since 1990 and covers over 75 percent of all U.S. retail residential applications Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100 and interest rate information is based on loans with an 80 percent loan-to-value ratio and points that include the origination fee.