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EPISODE #788
Will demographics be the saving grace for HECM lending?
For decades many reverse mortgage professionals have touted the demographic advantages that should boost the reverse mortgage’s acceptance and overall loan volume. So far that has not come to pass. Demographics are not destiny but they do hold valuable insights.
[Reverse Mortgage Daily] Reverse Mortgage Daily reports that according to the U.S. Census Bureau’s population projections, 4.4 million Americans will reach the age of 65 in 2024— a figure that comes out to roughly 12,000 people per day.
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2 Comments
Actually loan volume has decreased since 2007. HUD changes some good some bad have stifled growth as well as industry itself which seems to be stuck and without a clear vision. The recycling of loan officers from company to company fighting over low hanging fruit. Investment in boots on the ground and new markets from which to plant seeds that sprout. More talent sorely needed and lower overheads could be a guiding light.
As a demographer I totally agree that demographics are not destiny, except for me (ha!). But they can be a wind at your back or a drag on growth. The winds in the case of HECM markets are: household growth in the early retirement age groups, record illiquid home equity, and a strong penchant to “age in place.” The obvious drags are high interest rates, misunderstandings about the costs and benefits of reverse mortgages, and perhaps the geographic dispersion of the next best markets. There is still time, however, for interest rates to moderate and education campaigns to penetrate before the last Baby Boomer turns 62 in 2026.