For first time EVER, senior housing wealth topped $9T in Q1 2021. Collective housing wealth increased +3.4% compared to Q4 2020.
Senior Housing Wealth Topped $9T in Q1 2021
Collectively, seniors (ages 62 and older) saw their housing wealth increase +3.4% q/q or approximately $305B to a record $9.23T in Q1 2021, according to data from the National Reverse Mortgage Lenders Association (NRMLA) and RiskSpan.
The NRMLA/RiskSpan Reverse Mortgage Market Index (RMMI) jumped to 322.89 in Q1 2021, a consecutive all-time high.
Drivers of Increasing Senior Wealth
Those with the NRMLA ascribe this increase in senior wealth to an estimated 3% increase in values of homes owned by seniors during Q1 2021. This 3% increase in home values translates into about $329B.
This $329B was offset by an increase of 1.2% (or $23.9B) of senior-held mortgage debt.
Senior Wealth Challenges
Steve Irwin, NRMLA President, said, “New research from Fidelity forecasts the average 65-year-old couple will spend $300,000 on healthcare in retirement, while single women will spend $157,000 and single men will spend $143,000. As the Baby Boomer generation grows older, and the strain on government resources tightens, the strategic use of home equity can help retirees cope with these potential challenges.”
Wealth Transfer from Seniors to Younger Generations Eminent
We’ve discussed the eminent transfer of wealth from seniors to younger generations. Likely this wealth transfer will take the form of real estate transfers.
We encourage both the givers and the receivers of wealth and/or real estate transfers to consult with estate planning specialists such as tax attorneys, CPAs, etc. sooner rather than later. It’s never too early to be properly prepared.
Thanks to Reverse Mortgage Daily.
