‘Reassuring’ news about housing wealth

Housing wealth collectively for homeowners 62 and older in the U.S. grew to $6.8 trillion in the first quarter of 2018, an increase of $177 billion in senior home equity over the fourth quarter of 2017, according to the National Reverse Mortgage Lenders Association.

The association’s vice president, Steve Irwin, said the numbers “tell a reassuring story about housing wealth in an era when large numbers of retirees and near-retirees fear running out of money before the end of their lives. Homeowners 62 and older can responsibly tap some of the home equity they’ve built to support their longevity. One way to do that is with a reverse mortgage, which is the only mortgage that was designed for older people who are either no longer working or transitioning out of the full-time workforce, and who want to stay in their own home for as long as possible.”

At a recent symposium co-hosted by the Bipartisan Policy Center and the American College of Financial Services, researchers and policymakers discussed how home equity and reverse mortgages, which Irwin said are underutilized by seniors, can help provide retirement-funding security.

Shai Akabas, director of economic policy at the Bipartisan Policy Center, said “many policymakers and experts have overlooked this opportunity. With the country’s significant retirement security challenge, we can no longer afford to leave housing wealth on the sidelines.”

About 1 million households have utilized an FHA-insured reverse mortgage, according to the industry. Under a reverse mortgage, funds are advanced to the borrower and interest accrues, but the outstanding balance isn’t due until the last borrower leaves the home, sells or dies.

Additional information is available at www.ReverseMortgage.org.