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After a 10-year high in March, the reverse mortgage industry experienced April showers with a decrease of 3.8% in loan volume, according to the April Home Equity Conversion Mortgage (HECM) industry report from Reverse Market Insight.
The analysts there said HECM refinances have always been driven more by home price appreciation than interest rate changes, but rising rates do cool things down a bit. “We’d expect slower growth than last year at minimum, but further volume declines are certainly possible as expected rate increases work through the system,” the monthly report said.
The Southwest portion of the United States was the sole reverse mortgage market to see growth with its 545 loans, up 9% from March. The Mid-Atlantic market saw the sharpest decline from 272 loans in March down to 213 in April for a 21.6% decline.
Lenders were more mixed, with four of the top 10 gaining:
- Fairway jumped 15.1% to 305 loans, showing great resiliency in their non-refi oriented model.
- Open Mortgage rose 12.6% to 241 loans.
- FAR increased 8.7% to 611 loans, a 12-month high.
- HighTech was up 7.1% to 121 loans.
American Advisors Group, the largest HECM lender by units, saw its units drop from 1,944 loans in March to 1,758 in April for a 9.5% decline. Year to date, though, its unit volume is up 32%.