10 cities where senior home equity is most at risk

If there’s a time older Americans could potentially utilize their home’s equity it is now, thanks to record high inflation. However, that window of opportunity is closing thanks to a softening housing market. Redfin reports that…

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2 comments

John A. Smaldone August 22, 2022 at 5:06 am

Shannon,

Excellent statistical information, those that have watched received valuable information to use in their origination efforts. You offer the industry usefull information Shannon.

Thanks for your broadcasts,

John

Reply
James E. Veale, MBT August 27, 2022 at 8:46 pm

Unfortunately, the number of senior households who own this home equity is not cited in the original sources providing such information.
Assuming that the number of senior homeowners is 40 million, the mean home equity owned by a senior homeowner is $275,000. Of course, this certainly is not all that meaningful to those with less than $275,000 in home value nor is it all that meaningful to those with millions in home value who also possess home equity in equal or lower millions.

What is needed is information based on a meaningful strata of home values with the related 1) home equities and 1) number of senior homeowners in that stratum also provided. Until that information is developed and reported periodically, total home equity of senior homeowners is an interesting talking point lacking meaningful and relevant substance.

To believe that the information that is provided through most publications on real estate and mortgages is reasonably accurate is not far fetched but to believe that it is meaningful , current, and relevant may be reaching for “a bridge too far” for comfort. Numbers are just that, numbers. They may help with deciding how to successfully market yet they may be too old to be relevant to a highly successful marketing campaign. For example, HUD’s monthly HECM Snapshot Report is helpful in analyzing endorsement data but such data comes to us about four months on average after the relevant application was taken. That means that the Principal Limit reflects an appraisal that is months old which is based on sales data that is generally more than a month old when reported in the appraisal.

As a skeptic by professional training as a CPA years ago, age of the information we rely upon is critical to the sales results we want to obtain in this industry, while talking points can be reasonably old or recent, depending on the topic at hand. Discernment is a slippery yet valued attribute when used in a manner not intended to harm others.

Once you have the broad information that a trusted provider like Shannon presents, then for that information to be pragmatically useful in marketing success at a reasonable cost the work in analyzing that data has yet to start.

Shannon, the information you provide is most appreciated but for it to be useful in marketing, the analytical work must quickly start from there.

Reply

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