The Hottest, Coldest Reverse Mortgage Markets Through September 2016

National reverse mortgage volume may be trending lower in 2016 than in recent years, but now with three-quarters of the year already in the books, some markets continue showing signs of heating up while others strive to escape their year-over-year cold spells.

Year-to-date through September 2016, Home Equity Conversion Mortgage (HECM) endorsements are approximately 17% lower compared to the same nine month period in 2015, according to recent industry data tracked by Reverse Market Insight (RMI). Through September, 2016 totals 36,326 HECMs.

On a monthly basis, September saw a unanimous decline across the top-10 regions tracked by RMI, in turn producing 3,741 total units, a decrease of 14.7% from August.

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But looking at the year-to-date through September, it was the New York/New Jersey region that is putting up the largest volume drop-off compared to its year-ago levels. Through September 2016, the region reports 2,565 loans, which is 35.7% lower than the comparable period last year.

Each of the five cities that call N.Y./N.J. home posted lower volumes than last year, with Albany, N.Y., seeing the largest drop in production with 249 loans YTD as of September, a drop of 44.7% compared to its year-ago volume.

The Mid-Atlantic was also among the regions sporting the steepest drops in HECM production, falling to 2,860 loans YTD through September and down 33.1% from 4,278 loans one year ago.

Philadelphia, the region’s largest market, fell the hardest as it dropped 37.7% to 753 loans. Philly, as well as the greater Mid-Atlantic region, continued to sink further from its volume production in recent years.

Whereas Philly’s 2016 volume fell 33.1%, during the first nine months of 2015, the city’s volume was 1,208 loans, which only represented a 10.8% decrease from its year-ago period in 2014. Meanwhile, the Mid-Atlantic’s YTD volume through September 2015 of 4,278 loans was only 1% lower than the 4,322 loans the region reported for the comparable period in 2014.

Some cities, however, continued to grow their volume on a year-over-year basis. Most notably, Denver saw a slight increase in its 2016 YTD production over 2015’s comparable period. Through September 2016, the Mile High City grew its volume 30.8% with 1,397 loans. Through September 2015, Denver’s volume was up 30.4% from 2014 with 1,068 HECMs.

The year-over-year increases seen in Denver, as well as in Fargo, N.D., which grew 15.2% over September 2015’s YTD volume, helped push volume in the Rocky Mountain region up 10.5% to 2,353 loans, up from 2,130 units reported YTD September 2015.

Northwest/Alaska was the only other region to report growth through the first three quarters of 2016 when compared to the first three quarters of 2015. Although the region grew by a much larger amount from 2015 over 2014 (23.6%), Northwest/Alaska was up 2.4% with 2,068 loans YTD through September 2016.

Seattle continued to lead the way within the region with 914 loans, a growth of 4.3% compared to its YTD volume last year; while Portland, Ore. climbed 10.8% higher this year with 729 loans throughout the first nine months of 2016.

See where other regions, states and cities stacked up through September 2016 here.

Written by Jason Oliva

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  • With but a little over 2 months left until calendar 2017, it is questionable if total endorsements for calendar year 2016 will reach 50,000 for the year. Like fiscal year 2016, the endorsement total for calendar year 2016 total will be the worst such total in over a decade.

    We need more more information than geographic detail. We also need help with what type is doing better in what locations as well as pricing information. RMI has been quite helpful with geographic data but not with lead information or success rates by location by lead type.

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