How Has the Reverse Mortgage Market Evolved Historically and What is its Current Size?
The reverse mortgage market has seen considerable growth due to a variety of factors.
• In recent times, the reverse mortgage market has seen significant growth. With a projected leap from $1.79 billion in 2024 to $1.92 billion in 2025, the market is set to realize a compound annual growth rate (CAGR) of 7.6%.
Factors attributing to this growth during the historical period include an uptick in the elderly population, elevated home values, low-interest rates, increased financial literacy, the escalating desire for an additional retirement income source, growing homeownership trends, along with an increase in government-supported loan schemes.
What is the Forecasted Market Size and CAGR for the Reverse Mortgage Market?
The reverse mortgage market is expected to maintain its strong growth trajectory in upcoming years.
• In the coming years, the reverse mortgage market is predicted to experience significant growth, expanding to $2.54 billion in 2029 with a compound annual growth rate (CAGR) of 7.2%.
This growth over the projected period is largely due to the increasing need for retirement income solutions, interest in financial literacy programs, and demand for personalized financial solutions. There is also an escalating demand for long-term care funding solutions and a growing interest in home sharing and equity release options. The forecast period will also see major trends such as the adoption of virtual reality for property valuation, the creation of digital educational platforms to increase consumer knowledge, enhanced cybersecurity methods, the implementation of blockchain for secure transactions, and the use of artificial intelligence in loan processing.
What Key Factors and Trends Are Driving The Growth Reverse Mortgage Market?
The surge in property values is projected to fuel the expansion of the reverse mortgage sector in the upcoming years. The current market worth is dubbed as the home value, calculated from aspects such as location, condition, and shortage, while equity constitutes the difference between the market price of a home and the due mortgage amount, defining the owner's partial ownership. The increasing property values and the corresponding equity are propelled by elements like low lending rates, high demand in coveted areas, rising economy, and enhancement in local facilities and services. Property values directly determine the equity that can be used for reverse mortgages, leading to significant equity accruable to homeowners with rising home values. As per the House of Commons Library, a government-run agency in the UK, house prices were reported to have grown by 3.4% from October 2023 to October 2024, in December 2024. Furthermore, there was a seasonally adjusted increase of 0.5% in the average house prices from September to October 2024. Consequently, the growth of the reverse mortgage sector can be attributed to the escalating home values.
What Are The Market Segments In The Reverse Mortgage Market?
The reverse mortgage market covered in this report is segmented –
1) By Type: Home Equity Conversion Mortgages (HECMs), Single-Purpose Reverse Mortgages, Proprietary Reverse Mortgages
2) By Application: Debt, Health Care Related, Renovations, Income Supplement, Living Expenses
3) By End-User: Seniors, Retirees, Homeowners
Subsegments:
1) By Home Equity Conversion Mortgages (HECMs): Fixed-Rate HECMs, Adjustable-Rate HECMs, HECM for Purchase (H4P)
2) By Single-Purpose Reverse Mortgages: Government-Sponsored Programs, Non-Profit Sponsored Programs
3) By Proprietary Reverse Mortgages: Jumbo Reverse Mortgages, Private Lender Products
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What Trends Are Reshaping The Future Of The Reverse Mortgage Market?
Major companies operating in the reverse mortgage market are focusing on developing innovative solutions, such as customizable products, improving digital platforms for better customer experience, and expanding loan options to cater to different financial needs. For instance, in April 2024, Portfolio+ Inc., a Canada-based software company, launched the Portfolio+ reverse mortgage product. This innovative solution aims to empower financial institutions to meet the growing demand for reverse mortgages, allowing homeowners aged 55 and older to access tax-free equity in their homes. The product features customizable terms and interest rates, enabling lenders to tailor offerings to individual client needs, and ensures seamless end-to-end processing from origination to funding.
Who Are the Key Players In The Reverse Mortgage Market?
Major companies operating in the reverse mortgage market are:
• Fairway Independent Mortgage Corporation
• HomeBridge Financial Services Inc.
• New American Funding
• Movement Mortgage LLC
• PHH Mortgage Corporation
• American Pacific Mortgage Corporation
• The Federal Savings Bank
• American Financial Network Inc.
• Bay Equity LLC
• Plaza Home Mortgage Inc.
• Open Mortgage
• Longbridge Financial LLC
• Land Home Financial Services Inc.
• Homestead Funding Corp.
• Mutual Of Omaha Mortgage
• Salem Five Mortgage Company LLC
• LeaderOne Financial Corporation
• HighTechLending Inc.
• Advisors Mortgage Group LLC
• Radius Financial Group Inc.
• South River Mortgage LLC
• Guild Holdings Company
• All Reverse Mortgage Inc.
What Are The Regional Insights Into The Reverse Mortgage Market?
North America was the largest region in the reverse mortgage market in 2024. The regions covered in the reverse mortgage market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.
