The Numbers Are In: Hottest Reverse Mortgage Markets of 2016

The last month of 2016 provided a welcoming volume bump in what has otherwise been a discouraging year for reverse mortgage endorsements. As the broader industry grappled with lower volumes, some markets were hotspots for reverse mortgage activity during the year.

Endorsements for Home Equity Conversion Mortgages (HECMs) totaled 48,794 loans throughout calendar year 2016, according to recent industry data tracked by Reverse Market Insight (RMI). Compared to the previous year, volume in 2016 was down 13.5% from 2015’s full-year endorsement total as the lingering impacts of recent program changes continued to pressure industry volumes.

Even with 2016 proving to be the lowest year for HECM endorsements in more than a decade, several markets at the regional and city level were resilient to the widespread industry declines.

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Continuing a growth trend seen during much of the past year, the Rocky Mountain and Northwest/Alaska were the only regions to report higher HECM endorsement volume in 2016 with 3,263 and 2,767 loans, representing increases of 11.8% and 6.2% from 2015, respectively.

Growth in the Rocky Mountain region was driven by production in its largest city, Denver, which finished 2016 with 1,998 HECM endorsements, an increase of 33.6% from last year. Denver also saw a 1.5% increase in its number of active lenders in 2016, and a 9.7% increase in volume/lender compared to the previous year.

As for the Northwest/Alaska, the region sported two cities that were among the top growth markets for 2016. Seattle continued to lead the way in terms of unit count with 1,224 HECM endorsements during the year, an increase of 7.5% from 2015. But the big growth story here belonged to Portland, Ore., whose 981 loans represent an annual increase of 13%.

Compared to last year, Seattle saw its active lenders drop 1.5% to 64 and volume/lender increase 2.7%; whereas Portland’s active lenders grew 13% from 54 to 61 lenders, and volume/lender decreased 1.2%.

Aside from the Rocky Mountain and Northwest/Alaska region, HEMC endorsement growth largely remained in the Western U.S., with select markets within the Pacific/Hawaii also reporting higher volumes in 2016.

Notably, Sacramento, Calif. had the highest growth percentage in the region—and second-largest growth percentage among all reporting markets—for the year, seeing endorsements jump 15.2% to 1,383 total units in 2016. The fifth-largest region in the Pacific/Hawaii in terms of unit count, Sacramento also reported a 9% decrease in active lenders and a 15.1% jump in volume/lender.

Reno, Nev., also saw more HECM endorsement activity in 2016 than it did last year. In 2016, The Biggest Little City in the World reported 254 loans, an increase of 7.2% from the previous year, which also saw a 16.7% increase in active lenders.

See where other markets ranked year-to-date in 2016 here.

Written by Jason Oliva