Data shows a sudden rise in early Social Security claims during 2024–2025 could reshape housing decisions for retirees exploring reverse mortgages. Between October 2024 and April 2025, filings surged by 267,000—a 13% increase over the same period the prior year, according to a New York Times analysis of HousingWire’s Reverse Mortgage Daily report.
Historically, annual changes in Social Security claims have typically ranged between 2% and 3%. Experts from the Urban Institute and Boston College’s Center for Retirement Research attribute a recent sharp increase to widespread concerns about the Social Security Administration, including staff reductions, potential office closures, and political debates over the program’s financial stability.
Social Security Claims and Housing Affordability
For instance, one individual lost approximately $5,000 annually by claiming benefits at 64, while another forfeited around $300 monthly by filing over a year early. These reductions can significantly impact housing affordability, particularly for those whose primary fixed expense is rent or a mortgage.
Reduced retirement income increases the risk of mortgage payment difficulties or defaults among older homeowners. It may also lead retirees to consider downsizing, sharing living spaces, or relocating to more affordable areas to manage tighter budgets.
Reverse Mortgage Demand
Lower retirement income can heighten interest in reverse mortgages and similar home equity products to supplement income. Individuals in their late 50s and early 60s may find these options particularly appealing as they approach Social Security filing decisions, especially since older adults often face higher credit denial rates compared to the general population.
Federally insured Home Equity Conversion Mortgages and proprietary reverse mortgages could allow a borrower to delay Social Security claims by generating additional cash flow or eliminating monthly mortgage payments. According to the Social Security Administration, people who begin receiving benefits at the full retirement age of 67 get 100% of the monthly benefit, but that percentage increases for every month payments are delayed and can reach up to 124% if a recipient waits until age 70 to make a claim.
Policy Implications
Without congressional action, Social Security’s retirement trust fund is projected to be depleted by late 2032, triggering an automatic benefit cut of up to 22% under current law. Multiple policy ideas are circulating on the Social Security front, including bipartisan proposals to lift or eliminate the current $184,500 cap on wages subject to payroll tax, which could inject about $3 trillion into the system over 10 years.
Reverse mortgage companies and other housing stakeholders should pay close attention to how Social Security claiming decisions interact with mortgage terms, home equity levels, and long-term retirement planning. Larissa Morrell of Longbridge Financial noted that the demographics of the typical borrower have shifted during her 20-plus years in the industry, with more younger generations using reverse mortgages to pay off credit card debt or cover increasing expenses.
Between October 2025 and April 2026, new Social Security claims dropped by 235,000, or 10%, offsetting the previous year’s increase. This highlights how media coverage of Social Security’s financial health can influence claiming behavior, showing the need for housing professionals to stay informed about these developments and their market implications.
