Up, Down, or Sideways – Industry Trends February 2011

Much like clouds, ink blots, and famous impressionist paintings, an observer can see pretty much any shape they want in the reverse industry these days. Saver is looking up, lender exits are looking down, and everything else seems in between.

A potential government shutdown has come and gone, and HUD still managed to post application volumes for March in a timely fashion! The application headline number is good news considering the 8.5% increase in applications, a second consecutive monthly increase.

Unfortunately, we don’t have to look far for negative impressions either. The increase was entirely due to more business days in March than February (24 vs. 21), so apps per business day actually declined 5.1%.

The outlook report also provides our monthly reading on HECM Saver endorsements, which were up 38.2% from February to 409, and represented more endorsements than refinance transactions (5.6% vs. 5.1%). Saver is continuing to grow at a steep rate after a slow start, and at this pace could be in double digits for market share later this year.

In looking to the Industry Trends pdf report linked at bottom, we can see that Pennsylvania stands out as the fastest growing among the top 10 states, up 27.2% vs. Jan-Feb 2010. There’s been a strong assist from Philadelphia, which has continued to grow since we profiled it last October.

In contrast with Baltimore, which is now declining fast as refinance activity dries up, Pennsylvania has always had a broad base to support industry growth: 5th largest number of senior homeowner households in the nation, and the lowest of the top 5 in penetration rate (% of these households with a reverse mortgage) as of December 2010.

Demographics isn’t always destiny, but it’s very useful to understand how our industry is tracking to its demographic potential. We put this type of demographic information alongside volume and loan size information together for easy reference in positioning your reverse mortgage business for success in our Market Opportunity Report. See a free sample on our website and subscribe today for quarterly updates.

Click on the image below to view the full Industry Trends report for this month.

Industry Trends - February 20110