Spatial Variation in Reverse Mortgages Usage: House Price Dynamics and Consumer Selection

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• 作者：Donald Haurin ; Chao Ma ; Stephanie Moulton…
• 关键词：Reverse mortgages ; Mortgage choice ; Senior housing
• 刊名：The Journal of Real Estate Finance and Economics
• 出版年：2016
• 出版时间：October 2016
• 年：2016
• 卷：53
• 期：3
• 页码：392-417
• 全文大小：677 KB
• 刊物类别：Business and Economics
• 刊物主题：Economics
  Regional Science
  Finance and Banking
  
• 出版者：Springer Netherlands
• ISSN：1573-045X
• 卷排序：53

文摘

Reverse mortgages have been obtained by nearly one million senior households. In the future, the number of eligible households will grow substantially, about 80 % are homeowners, and many of them have substantial equity in their home. We study state-level variations in rate of originations of HUD’s Home Equity Conversion Mortgage (HECM) product. Our focus is on the impact of house prices on the origination rate. We test the hypothesis that in states where real house prices are volatile and the current level is above the long term norm, seniors rationally anticipate future reductions in house prices and lock-in their housing equity gains by obtaining a reverse mortgage. We test alternative hypotheses, the first being that seniors living in states with high rates of house price appreciation increase their use of HECMs as a means to convert an illiquid wealth capital gain into a more liquid asset. A second alternative hypothesis is that the intertemporal changes in originations of HECMs were a result of changes in the supply of mortgage originators. Our empirical work supports the hypothesis that seniors used HECMs to insure against house price declines, but we find no evidence in support of the alternative hypotheses.