While aggregate senior home equity has consistently risen in the last several years, will its growth taper off as appreciation slows?
The RMMI also reached an all-time high in Q1, climbing to 244.73 thanks to an estimated $182 billion increase in home values. "As home price appreciation begins to slow, homeowner equity, the largest source of wealth for most middle class American households, will grow more slowly." "An actual decline in wealth is much less likely, and it’s just a matter of time before the wealth of senior homeowners exceeds $7 trillion," he said.
Furthermore, May saw its lowest appreciation in the last four years, which is surprising as it’s typically one of the strongest months of the year for home price gains.
What’s slowing it down?
A recent report from Freddie Mac stated mortgage rates reached their fourth-highest level of 2018, and S&P Dow Jones Indices and CoreLogic indicated rates are growing at least twice the rate of inflation.
Earlier this year, President Donald Trump announced he would implement various trade tariffs internationally, some of which have affected the housing industry.
Particularly, lumber taxes have increased the overall cost of homebuilding.
But senior home equity has maintained steady growth over the years, and while this could begin to slow a little as home price appreciation fumbles, it doesn't detract from the fact that seniors have nearly $7 trillion in tappable equity.