"There has not been a lot of growth in the HECM space, Mayer said. New originations have almost entirely been driven by what the 10-year rate is in the market. HECMs go up when the 10-year rate goes down, and HECMs go down when the 10-year rate goes up. I do think we're going to see some growth in the HECM space in 2026, but the bulk of it is in proprietary products."
"There was an ever-increasing interest in pursuing reverse mortgages as a tool to monetize home equity that senior homeowners have built up over time, Irwin said. However, given the current interest rate environment, we saw challenges with people qualifying and challenges with the high upfront mortgage insurance premium that comes with the FHA-insured product. Irwin said growth in the private-label reverse mortgage space helped offset these challenges, something that's expected to continue in 2026."
HECM pricing improved over 2025, reducing interest accrual and increasing available cash on new loans. HECM originations tracked the 10-year Treasury rate: originations rose when the 10-year fell and declined when it rose. Growth in the overall reverse mortgage market in 2025 was concentrated in proprietary, private-label products rather than FHA-insured HECMs. High interest rates and large upfront FHA mortgage insurance premiums limited borrower qualification and HECM uptake. Proprietary lenders improved LTV/PLF ratios and introduced product innovations aimed at new property segments. Strong investor appetite for private-label reverse mortgages is expected to support production and innovation in 2026.
Read at www.housingwire.com
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