Reverse mortgage companies are gearing up for a productive 2015 thanks to rising growth in senior home equity. According to the Federal Housing Finance Agency (FHFA), senior homeowners now have 30 percent more equity in their homes, on average, than they did eight years ago, and that number has been climbing steadily since home values fell nationwide during the housing crisis. At the end of Q3 2014, total equity among homeowners 62 years of age and older was $3.84 trillion. Furthermore, given that most Baby Boomers responding to a Demand Institute (DI) poll reported that they plan to “age in place,” meaning that they intend to retire and continue living in their current homes, reverse mortgages will likely be a viable source of monthly income for many aging homeowners.
“During the financial crisis, Baby Boomers saw their wealth drop dramatically,” explained Louise Keely, president of DI. She added that although boomers may have “adapted their retirement and housing plans to new financial realities,” they are likely to stay in their homes after retirement in order to forge strong family relationships and remain near their children and grandchildren.
by Carole Ellis