Housing prices are on the upswing, and if you’re considering a reverse mortgage, that’s great news for you.
The housing crash did a number on many homeowners. But that lost equity is being regained across the country as home prices trend upward.
By the end of last year, home prices nationwide were 20% above 2011’s fourth quarter trough, according to national bellwether CoreLogic Case-Shiller Index. As of March 2014, the national index was up more than 11% from the previous year.
Prices in many areas remain below their 2006 peak. Nationally, home prices are still about 16% beneath what they hit in the first quarter of 2006.
Still, more than half the country—33 states, to be exact—have seen growth in CoreLogic Case-Shiller’s Home Price index above 5% in the past year on a seasonally adjusted basis.
Some areas in particular have enjoyed double-digit growth, led by California (up 17.2%) and a few other western states, including Oregon, Arizona, and Nevada.
Southern states Texas, Florida, and Georgia are in the double-digit growth club as well, joined by some East Coast states: New York, Rhode Island, and Maine.
The home appreciation rate through the end of 2014 will be about 5.3% nationally, CoreLogic predicts, higher than the long-term annual average appreciation rate of 4.5% dating back to 1975.
Why is the home price improvement significant for reverse mortgages? The amount of proceeds you can get from a reverse mortgage depend on a few factors, including your age, current interest rates, and how much home equity you have.
Considering that homes are gaining equity while interest rates remain at historic lows, conditions are very favorable for a reverse mortgage. Even if you’re not in a state where home prices have seen large increases, your particular area may be seeing outsize improvement in appreciation.
If you’re trying to time your reverse mortgages with the improvement of the housing market, consider a new tool from Zillow called the Zestimate. This tool takes individual housing information—the number of bedrooms and bathroom, for example, along with square footage and other individual characteristics—and combines it with a variety of local economic and housing data that might impact your home’s value in your region in the future.
Curious about how much you could stand to get out of your home right now? Try out our online reverse mortgage calculator to get an estimate. And if you have any other questions, contact one of our pre-screened reverse mortgage specialists today.
