Comeback Cities – HECM Trends July 2012

The single most notable fact about July’s HECM endorsement figures is the volume decline. That stands out in stark relief on page 1 of HECM Trends, with the purple line tracking 2012 volume dipping dramatically to the lowest level seen in years and deviating significantly from the prior year comparison lines.

We’ve already written about the decline and its causes though, so HECM Trends is about finding the changes below that headline.

This month, the item that stands out most is Atlanta, Pensacola and Orlando rising to take the top 3 spots on the average maximum claim amount (MCA) tables on page 2. All 3 cities have been hovering in the list for months, but ascended to the top spots on the back of healthy average loan sizes in July.

  • Atlanta in particular has seen a resurgence in home values for HECM loans, to $309,000 on average in July 2012 (and $290,000 year to date) from $199,000 a year earlier. There is some volatility to these averages even in the biggest cities, but the trend is leading up here for over a year now.
  • Orlando has seen average loan sizes for HECM at both ends of the scale lately, with monthly averages from $119,000 up to $341,000 so far in 2012.
  • Pensacola is a bit lower average than the other two but also increasing so far this year, up to $167,000 from an average of $133,000 last year.

Given that Florida and Georgia have been among the harder hit states for both home price declines and bank failures, these readings add one more point to the articles we’ve seen recently that these states are on the road to recovery.

Check out the full report below by clicking on the image and learn more about what’s working now in reverse.

HECM Trends