For the first time in almost four years, home prices have decreased for three consecutive months. While aggregate senior home equity has consistently risen in the last several years, will its growth taper off as appreciation slows?
The latest NRMLA/RISK SPAN Reverse Mortgage Market Index revealed that senior home equity reached $6.8 trillion in the first quarter of 2018. The RMMI also reached an all-time high in Q1, climbing to 244.73 thanks to an estimated $182 billion increase in home values.
Since the index started, it has tracked a consistent increase in senior home equity. But now that home price growth is appearing to slow, will that change?
“Equity gains by homeowners in recent years have been substantial as home prices have been rising quickly in response to strong homebuyer demand and little inventory for sale,” said, Mark Fleming, chief economist at First American. “As home price appreciation begins to slow, homeowner equity, the largest source of wealth for most middle class American households, will grow more slowly.”