In 2024, total originations of closed-end home equity loans and open-ended home equity lines of credit (HELOCs) grew 7.2 percent compared to 2023, according to the recent Mortgage Bankers Association’s (MBA) 2025 Home Equity Lending Study. Outstanding debt spiked 10.3 percent.
For the study, MBA collected data representing $24.8 billion in originations volume, $70 billion in outstanding borrowings and $167.4 billion in maximum credit extended to borrowers.
In 2022, 65 percent of borrowers cited the reason for tapping into home equity was home renovations. This dropped to 46 percent in 2024 while debt consolidation grew from 25 percent to approximately 39 percent.
“With close to $35 trillion of homeowner equity in residential real estate and many homeowners locked into low-rate first mortgages, HELOCs and home equity loans have become the product of choice for many homeowners,” Marina Walsh, MBA Industry Analysis vice president, said. “Lenders in our study expect year-over-year growth of almost 10 percent for HELOC debt and 7 percent for home equity loan debt in 2025.”
Other findings include:
Only half of home equity applications closed while 46 percent of home equity loans closed.
For HELOCs, the average FICO score was 771 while for home equity loans the average FICO score was 749.