California, Arizona Reverse Mortgage Volume Counters National Trend

Not all reverse markets are equal, and while reverse mortgage volume declined slightly in the month of May, several markets bucked the national trend. 

Endorsement volume fell 1.9% year-over-year on a national basis; a figure that has yet to account for an expected volume slump following the implementation of Financial Assessment as part of the origination process. 

But despite that decline, two markets in particular are booming from a growth standpoint, according to analysis released by Reverse Market Insight this week. 

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California saw an 8.8% growth rate, an uptick from April when it measured 7.4% year-over-year growth. 

Similarly Arizona ticked up in terms of annual growth, charting 5.7% growth, up from 3.6% in the previous month. 

While still declining in terms of its growth rate, New York state still surpassed the national average with -1.8%, slightly higher than the national average and an increase from the previous month’s growth rate decline of 4.2%. 

RMI points to several factors driving the regional rebounds.

“In general, rebounding real estate markets can drive one or more of three different HECM segments for these states,” says John Lunde, RMI president. 

In California, where home prices have continued to rise following the housing crash, refinance transaction volume is more than 24%, versus the national average of 10.2%. 

The reverse mortgage for purchase loan is driving some of the uptick in Arizona, where it comprises 6.9% of loan volume versus the national average of 3.8%, according to data tracked by RMI. 

And generally, all three states noted have seen home price rebounds or ongoing stability through national ups and downs, which has led to a better equity position for prospective reverse mortgage borrowers.

View the RMI report

Written by Elizabeth Ecker

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  • HECMs for Purchase are a niche within a niche. Not long ago, H4P celebrated its sixth anniversary and it has yet to reach 2,500 endorsements in any fiscal year. Not only does it seem H4P will not reach 2,500 endorsements this fiscal year but also next.

    If this is a sleeping giant when will we see the giant part of that term?

    • Cynic,
      When reverse mortgage professionals start seeing, speaking and developing relationships with the more than 2 million licensed real estate agents in this Country. That is when we will see the giant part of that term…
      Most will not put forth the effort, and the few who do, are doing very well!
      Mike

  • Thanks Cynic!
    My little start up mortgage company in Florida currently has 15 loans in our pipeline, we just hired our 6th full time LO.
    7 out of the 15 loans are H4P. We have closed 6 H4P’s since opening in February.
    Of course my school is constantly giving H4P classes to real estate agents here in Florida as this is my home state.
    Teach them and the loans will come… LOL!

    • Mike,

      Florida should have 2,500 H4P (and more) endorsements per year alone just because of the large numbers of seniors moving into your state. (Where I live more seniors move out of our state annually than moving in.) Most of those moving into Florida offer large metro Florida originators a real heads up in building a H4P business.

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