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.
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.
Written by Elizabeth Ecker