Proprietary Loans Drive Reverse Mortgage Market Growth

Proprietary reverse mortgages are the primary driver of recent growth within the reverse mortgage market, surpassing government-insured Home Equity Conversion Mortgages (HECMs), according to an analysis of Home Mortgage Disclosure Act (HMDA) data. New View Advisors reported that total reverse mortgage volume increased from $6.25 billion in 2023 to $7.51 billion in 2024 and reached $9.65 billion in 2025. This expansion was largely fueled by proprietary reverse mortgages, which saw their volume surge from $1.1 billion in 2023 to $3.8 billion in 2025, representing a substantial 245% growth over two years. In contrast, the overall reverse mortgage market experienced approximately 54% growth during the same period. The shift towards proprietary products is even more pronounced when examining loan counts. Private-label reverse mortgages increased from 1,774 units in 2023 to 3,212 in 2024 and 6,979 in 2025. Meanwhile, HECM volume remained relatively flat, with unit counts of 23,358 in 2023, 24,648 in 2024, and 24,850 in 2025, indicating a modest gain of about 6% over two years. Data from the first half of 2026, as analyzed by New View Advisors, suggests this trend is continuing. The firm projects that HECM originations could decline to 2023 levels this year on an annualized basis, while proprietary volume may approach the record levels observed in 2022 for that product type. This divergence in growth is occurring within a challenging interest rate environment affecting all mortgage lenders. Higher interest rates are anticipated to impact HECM products more significantly than proprietary offerings. This is largely attributed to the upfront mortgage insurance structure inherent in HECMs. The initial mortgage insurance premium for a HECM is calculated as a percentage of the maximum claim amount, which is determined by the lesser of the property's value or the 2026 maximum loan amount of $1,249,125. As interest rates rise, borrowers receive reduced HECM proceeds, yet the upfront mortgage insurance expense—often close to $25,000 for homes valued at or near the maximum claim amount—remains a substantial cost. This structure makes HECMs less attractive in a high-rate environment compared to proprietary options, which do not carry the same mortgage insurance requirements. The analysis was published on a Wednesday, citing data from the Consumer Financial Protection Bureau (CFPB) and the Federal Financial Institutions Examination Council (FFIEC).