After stagnant growth in recent years, reverse mortgages jumped 6.23% in 2025 according to the National Reverse Mortgage Lenders Association. A report by Grand View Research projects the reverse mortgage market to reach $2.71 billion by 2030.
Why are reverse mortgages making a comeback? And are current housing market trends contributing to this sudden increase?
More Seniors to Borrow
Some stark demographic numbers loom over the U.S. in the coming decades. The Census Bureau notes that seniors already outnumber children in nearly half of U.S. counties. A prior Census projection forecasts that they’ll do so nationwide by 2034.
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Home Equity and Cost of Living Both Rising
Home prices skyrocketed during and after the pandemic, shooting up 54.9% from early 2020 to early 2025 per the National Association of Home Builders. That supercharged many seniors’ home equity.
Inflation has also sent the cost of everything else soaring as well however, leaving many retirees house rich but cash-poor.
“Prices for everyday living including food, utilities, gasoline and health insurance have leapt, and retirees reliant on fixed incomes are seeing their dollar buy less,” notes Kevin Walton of C2 Reverse Mortgage. Reverse mortgages offer a solution to tap home equity for cash.
Loss of Income
Not every retiree made an intentional decision to leave the workforce. Rick Miller of CSI Wealth Management has seen plenty of clients lose either a primary or secondary source of income over the last year, pinching their cash flow.
“Clients have asked me about reverse mortgages after losing a part-time job, or the premature death of a spouse and loss of their Social Security benefits,” Miller explained.
And in a slowing labor market, finding a new retirement job doesn’t always happen quickly — if at all.
Add a Property Cash-Free
With enough equity in their existing home, retirees can buy a second home without a down payment using an HECM for Purchase loan. That can help them spend part of the year closer to family, or buy a vacation home.
Walton adds that some seniors use reverse mortgages to build an accessory dwelling unit (ADU) for their existing home.
“The homeowner can collect rent from the ADU while also avoiding a mortgage payment for a cash flow win-win. Some even move into the ADU and rent out the main residence for higher rent,” he noted.
Pay for Age-in-Place Costs
Three-quarters of older Americans said they want to age in place, according to AARP. Yet that comes with its own costs, from home modifications to caregivers and increasing healthcare bills.
Reverse mortgages can help cover those costs, without the retiree having to pay cash.
The reasons don’t end there, either. Americans are living longer but often retiring earlier, pinching cash flow. Many also help children or grandchildren with higher education expenses, which have themselves exploded over the last four decades. All the while, pensions have all but disappeared from the private sector, leaving many seniors facing the stark reality that they undersaved for retirement.
It all makes for a perfect storm of rising reverse mortgage originations in this decade and beyond.
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This article originally appeared on GOBankingRates.com: Why Reverse Mortgages Are Soaring in Popularity Again
