Reverse mortgage endorsements declined in May, with HECM volumes falling 4.7% month-over-month to 1,967 loans. The drop marks a continuation of cooling activity in the senior lending space after a modest uptick earlier in the year.
Mutual of Omaha Mortgage retained its leading position, endorsing 423 loans and capturing a 21.5% share of the market. The firm has held the No. 1 spot for several months, though overall industry volumes remain below the peaks seen in 2022.
The decline comes amid elevated interest rates and tighter underwriting standards, which continue to pressure home equity conversion mortgage volumes. Borrowers face higher costs of capital, reducing the appeal of reverse mortgages as a financial planning tool for retirees.
For seniors considering a HECM, the current environment means fewer options and potentially lower proceeds due to rate-driven adjustments in principal limits. Some lenders have tightened eligibility criteria, further narrowing the pool of qualified borrowers.
Economists caution that persistent rate headwinds could keep HECM volumes subdued through the second half of the year. However, a stabilization in home prices may provide a floor for the market, should rates ease later in 2026.