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On March 4, 2015, Posted by , In Caregivers, By ,,, , With Comments Off on Caregiving Services in Grosse Pointe, MI

Seniors’ Home Equity Falls Sharply

Even though home prices remain depressed, Americans over the age of 62 still had an estimated $3.21 trillion in home equity at the end of the first quarter of 2011, according to the latest NRMLA/RiskSpan Reverse Mortgage Market Index.

But that number is down $87.3 billion from the previous quarter. It’s also far below the peak level of $4.02 trillion, reached in the fourth quarter of 2006. Produced by the National Reverse Mortgage Lenders Association and RiskSpan, the index has tracked senior home equity and values since the beginning of 2000.

Senior home values reached $4.24 trillion in the first quarter, down $92.58 billion from the previous quarter. They’re off from the $4.98 trillion peak in the first quarter of 2007.

Although the drop in equity means many seniors who want to age in place have considerably less money to tap for home equity loans, lines of credit or reverse equity mortgages—as well as less money to leave to their heirs—the overall numbers only tell part of the story.

For instance, older people who live in places where there was a lot of speculative home buying or rampant unemployment during the mid-decade boom years were harder hit than others as their home values were decimated. Similarly, those who bought homes during this time and took out big mortgages also saw their values fall and their equity drop or even disappear.

However, not everyone has been badly hurt, especially those who live in areas where home prices have remained stable. “And we shouldn’t lose sight of the fact that one in three homes is owned free and clear, without a mortgage,” Allen H. Jones, chief operating officer of RiskSpan, told AgingCare.com.

Moreover, a volatile stock market and low interest rates on certificates of deposit have inspired many older people to pay down their mortgages rather than make alternative investments. Offsetting the decline in housing prices, mortgage debt levels fell for the seventh straight quarter, to their lowest levels since the second quarter of 2007.

 
Source: agingcare.com

Contact Pure Home Care Services at (586) 293-2457 today! If you live in Grosse Pointe or the surrounding area, we can help you care for your loved ones.

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