Home Equity Conversion Mortgage (HECM) endorsements may have started 2016 at a low point relative to recent years, but with a couple of months worth of volume already in the books, this year is serving as a fresh start for some reverse mortgage metropolitan markets.
On an industrywide basis, HECM endorsements began 2016 with 3,889 units, roughly 21% lower than their year-ago level in January 2015, according to industry data tracked by Reverse Market Insight (RMI).
January’s total was also one of the lowest volumes recorded in a single month in the last two years, higher only than August and September 2014, when endorsements were 3,256 and 3,762 units, respectively. Although March endorsements will tell if volume is on the rise, the 17% volume bump in February is reassuring for now.
Geographically speaking, January served as a strong jumping-off point for some markets to have a clean start to 2016.
At the state level, nearly all of the top-10 states tracked by RMI reported year-over-year endorsement declines in January. The only exceptions were Colorado and Washington, which posted volume that was 34% (138 units) and 14.6% (102) higher, respectively, than their January 2015 totals.
Drilling down to a more local level, volume among the top-10 cities fared better compared to states’ performances, with only four cities reporting declines—the largest of which was Brooklyn, whose 21 units in January are 40% lower than they were a year ago.
Seeing the largest year-over-year increase was Denver, which grew 85.7% to 26 loans this past January. Overall, Denver ranked eighth among cities for endorsement volume year-to-date through January 2016.
In terms of growth, The Mile High City was followed closely by Phoenix, which reported an increase of 77.8% to 32 total loans recorded during the month.
San Jose, Calif. also reported a strong showing in January with 29 loans, an increase of 26.1% from January 2015. Overall, the San Jose ranked sixth among the top-10 cities for reverse mortgage volume in January 2016.