Three metro areas, San Diego, Miami and Las Vegas, account for the largest share of homeowners aged 65 or older who still have a mortgage, according to new data from LendingTree.
Despite long mortgage terms, traditional loan products remain popular for borrowers at or over the age of 65. This causes issues for both seniors and the reverse mortgage industry, as reverse professionals must explain to senior borrowers that a mortgage designed for their demographic may be a better option than a one-size-fits-all mortgage with a monthly payment.
“Across these metros, an average of nearly a quarter — 23.74% — of homeowners 65 and older have a mortgage,” the report states. “That’s about 5 percentage points higher than the 50-metro average of 18.96%. In 2019 — before the pandemic — Miami had the largest share of retirement-age homeowners, while Las Vegas was fourth and San Diego was seventh.”
Conversely, Salt Lake City, Austin and Dallas have the smallest shares of 65-plus homeowners with mortgages, according to the report.
And, half of the top 10 metros with the largest share of 65 or older mortgage holders are in California, according to the data.
“Five of the 10 metros with the largest share of 65-and-older homeowners with a mortgage are in California, while four of the 10 metros with the smallest share of 65-and-older homeowners with a mortgage are in Texas,” the report states.
California is also the top state in the nation for reverse mortgage business.
Home prices across the state of California increased by an average of 5.9% over the last year, according to Zillow. A high share of senior homeowners, coupled with increases in home price appreciation, underscores the reason for reverse mortgage business within the state.
However, the homes owned by seniors generally have lower median values than those owned by the wider population, according to LendingTree.
“Across the nation’s 50 largest metros, the median values of older homeowners’ homes are worth an average of $20,214 less than the median value of homes owned by the general population, up from $10,626 in 2019,” according to the report. “Los Angeles is the only metro where the median value for homes owned by those 65 and older is higher than the median value of homes owned by the overall population.”
What may be of interest to reverse mortgage professionals is that seniors still have fewer housing expenses than the general population, even with a monthly mortgage payment, the report shows.
“Across the nation’s 50 largest metros, median monthly housing costs for 65-and-older homeowners with a mortgage are an average of $297 less than for the overall population of homeowners with a mortgage,” the report states.