Seattle Emerges as Bright Spot Amidst Reverse Mortgage Fallout

Despite the downturn in Home Equity Conversion Mortgage endorsement volume in February, largely attributable to program changes implemented in October 2017, several areas saw substantial year-over-year growth during the first two months of combined data in 2018. Those areas, Seattle and Portland, have outpaced the national 27.9% increase in year-over-year volume for January and February combined, according to data released this week from Reverse Market Insight.

In January and February 2018, Seattle rose more than 112% in loan volume, to 87 loans during the two-month period. Likewise, Oregon as a whole has increased nearly 107% in volume during that period, to 360 loans total, driven in part by the Portland area, with a 75% year-over-year increase for January and February combined.

There is still an anticipated drop-off mirroring the national averages for these local hot spots, RMI’s President John Lunde tells RMD. The hot spots could be driven by a relatively larger surge of applications prior to the program changes versus the national surge, and originators in the Oregon market report a substantial marketing campaign targeted on the area. Likewise, home value appreciation has been strong in both markets.

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According to the S&P CoreLogic CS Home Price Index, home prices rose 6.3% year over year in February. Among the top 20 metros tracked by the index, Seattle took the top position with more than 12% gained in home values year-over-year, while Portland, Oregon gained 6.7% over the same time period, ranking No. 9 among the top 20 metros.

The RMI data on relative hot spots comes on the heels of a more-than 17% decline in volume reported in February endorsements.

Written by Elizabeth Ecker