The impact of regional housing price changes on voluntary termination of reverse mortgages: Focusing on age-group differences controlling for mortality risk

This study aims to overcome the limitations of previous research by distinguishing between terminations due to death and those due to voluntary choice and by addressing the insufficient reflection of micro-level price changes in regional housing markets. We construct quarterly panel data at the subscriber level, utilizing the complete dataset of reverse mortgage subscribers for apartments up to the end of June 2025 and incorporating sales price indices at the district level. Furthermore, we aim to identify the pure effect of economic factors on voluntary termination by controlling for the possibility of attrition due to death by setting age-specific mortality probabilities as an offset in the model. Using a discrete-time hazard model, first, the analysis confirmed that both long-term cumulative housing price changes in enrollment and short-term price changes from the immediately preceding quarter were key drivers that increased the risk of voluntary termination. Second, the impact of housing price appreciation on termination was heterogeneous across age groups, showing a tendency to be most sensitive among the younger group and weaken with increasing age. This suggests the need for customized risk management that considers both regional and age-specific characteristics to ensure the sustainability of the system.