Chart of the Week: HELOC and Home Equity Loan Origination Volume by Known Borrower Usage

MBA recently completed its 2025 Home Equity Lending Study, tracking trends in origination and servicing for home equity lines of credit (HELOCs) and home equity loans. According to the study, total originations of open-end home equity lines of credit (HELOCs) and closed-end home equity loans increased in 2024 by 7.2% from the previous year when comparing originators that reported in both years. Total HELOC and home equity loan debt outstanding grew 10.3%.

While lenders in the study expect year-over-year growth of almost 10% for HELOC debt, 7% for home equity loan debt in 2025, and additional growth in 2026, borrowers’ reasons for tapping home equity may be shifting. In 2024, approximately 39% of borrowers cited debt consolidation as the reason for applying for a HELOC or home equity loan, compared to 25% two years prior. Those borrowers who indicated home renovations as their reason for usage dropped to 46% of volume, compared to 65% in 2022. The remaining borrowers indicated emergency/cash management or big-ticket financing, such as for education or a down payment (bridge loan alternative, second homes, investment homes).

Debt consolidation as a reason for borrower usage presents considerable potential. According to the Federal Reserve, there is close to $35 trillion of homeowner equity in residential real estate. At the same time, balances on non-housing debt are growing. Last week’s release of the Federal Reserve Bank of New York’s Quarterly Report on Household Debt and Credit showed an increase of 56% in non-household debt (credit cards, car loans, student loans, etc.) over the past decade – from $3.2 trillion in the second quarter of 2015 to $5.0 trillion in the same quarter of 2025. As some households experience financial burdens, existing homeowners may choose to tap home equity through a first or subordinate lien, over more costly financing alternatives.

A highlights document summarizing key findings from the MBA’s 2025 Home Equity Lending Study is now available for purchase.

–Marina B. Walsh, CMB: mwalsh@mba.org; Jon Penniman: jpenniman@mba.org