HECM volume rose in March, but the increase does little to change the broader trajectory of a slowing reverse mortgage market — one where growth is increasingly coming from outside the FHA channel.
HECM endorsements climbed 16.3% month over month to 2,117 loans in March, according to Reverse Market Insight data. But volumes remain near recent lows and were down 0.5% compared to a year earlier, signaling limited momentum. At the same time, proprietary reverse mortgages, which are not fully captured in federal reporting, continue to gain share, shifting where production is happening and how originators compete.
What It Means For LOs
- HECM volume remains subdued despite a month-over-month rebound
- Proprietary reverse products are capturing a larger share of production
- Reverse strategies tied solely to FHA volume may face tighter pipelines
Monthly Gain Follows February Dip
March’s increase follows a weaker February, when endorsement volume dropped to 1,821 loans. The month-over-month jump reflects a partial rebound, but activity across both months remains among the lowest levels recorded since mid-2025.
That trend points to a market that has stabilized at lower volume levels rather than one entering a sustained recovery phase.
While HECM data provides a clear view into federally backed reverse activity, it does not fully capture growth in proprietary reverse mortgages.
According to Reverse Market Insight, much of the segment’s expansion in recent years — outside of the refinance-driven surge between 2018 and 2022 — has come from proprietary products. Those offerings, typically held on the balance sheet or securitized privately, are becoming a larger factor in overall reverse mortgage production.
That shift changes the competitive landscape. Borrower demand may still be present, but it is increasingly being met through non-HECM channels.
Regional Growth, Familiar Leaders
March gains were broad across regions, with areas including the Rocky Mountain, Northwest, New York/New Jersey, and Mid-Atlantic regions each posting roughly one-third increases from February levels.
Warmer-weather markets continued to lead overall volume. The Pacific/Hawaii region recorded 498 endorsements, followed by the Southeast/Caribbean with 469.
On the lender side, Finance of America led March production with 454 endorsements, followed by Mutual of Omaha Mortgage at 409. Despite the monthly shift, Mutual of Omaha Mortgage maintains a slight year-to-date lead.
Both lenders, however, are operating below their pace from the same period last year, reflecting broader softness across the market.
A Market Transition, Not A Rebound
The March data points to a reverse mortgage market in transition rather than recovery.
For originators, the takeaway is straightforward: the modest rise in HECM volume does not indicate a return to prior production levels. Instead, activity remains constrained, while competitive pressure is increasing as proprietary products take a larger role.
In that environment, lenders and originators relying on HECM volume alone may face continued headwinds as the market evolves.
