HELOCs and Home Equity Loans: Both are Growing Fast

Americans put off their home purchasing plans due to high interest rates and high home prices.

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The annual growth rate of homeowner equity continued to increase, up by 18% year-over-year in the third quarter of 2022, reaching an all-time high of $20 trillion.

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That represented an increase of $600 billion from the second quarter.

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Home equity line of credit was up 41% year-over-year in the third quarter of 2022.

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Home equity loan originations grew 47% year-over-year in 2022, representing the most home equity loan originations on record since 2010.

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“The main reasons why homeowners utilize the equity available to them is to consolidate debt, home improvement and big ticket purchases,”

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says Joe Mellman, senior vice president and mortgage business leader.

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Mortgage originations continued their slowdown in the face of higher interest rates.

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Third quarter of 2022, showing a 56% decrease year-over-year in overall originations, down to 1.5 million from 3.4 million in the third quarter of 2021.

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Homeowners don’t want to leave a 3% interest rate for nearly double the rates.

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Homeowners use their equity to put money back into home renovations or consolidating other high interest rate debt.

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