Home Equity Lines of Credit Surge to 2008-Era Volumes
HELOC originations reached $70 billion in the first quarter, the highest quarterly total since 2008 as homeowners tapped record equity.
Home equity lines of credit (HELOC) originations reached $70 billion in the first quarter of 2026, the highest quarterly total since 2008, according to data from the Federal Reserve and TransUnion. The surge reflects record homeowner equity levels and rising demand for liquidity as higher-rate environments have made cash-out refinances less attractive.
The $70 billion first-quarter total represented a 22% increase over the same quarter in 2025. Total HELOC balances outstanding reached $410 billion in March, the highest since 2011. During the post-2008 period, HELOC balances had contracted as banks pulled back from the product and homeowners drew less heavily on equity.
"Homeowners are making a rational trade-off: their first mortgages carry rates of 3.5 or 4%, so touching that first lien to access cash is expensive. A HELOC preserves that low rate," said David Sandberg, chief economist at TransUnion. Sandberg noted that tappable home equity hit $11.3 trillion in March, according to ICE Mortgage Technology data, close to the all-time peak.
Average HELOC origination rates ran at 8.8% at the end of the quarter, down modestly from the 9.1% peak set in late 2023 but still well above the 6.0% prevailing rate on cash-out refinances available to qualified borrowers. The variable-rate nature of most HELOCs means borrowers carry interest rate risk, a factor that industry economists expect to complicate repayment behavior if Fed policy diverges from current market pricing.
Lender participation has broadened. Bank of America, Wells Fargo, and JPMorgan Chase have all expanded HELOC origination capacity, as have several large independent mortgage banks including Rocket Mortgage and Rate (formerly Guaranteed Rate). Credit unions have grown their HELOC share as well, accounting for 29% of first-quarter originations, up from 24% in 2023.
End-use data from TransUnion survey responses showed 38% of Q1 borrowers intended to use proceeds for home improvements, 29% for debt consolidation, 17% for investment purposes (including additional real estate), and 16% for other purposes. The debt consolidation share has risen as credit card balances reached record levels, with the Federal Reserve reporting $1.18 trillion in revolving credit outstanding at the end of Q1.
Delinquency rates on HELOCs remain low. The Mortgage Bankers Association's latest quarterly survey placed 30+ day HELOC delinquency at 1.7% in Q4 2025, compared with the 40-year average of 2.4%. Serious delinquency (90+ days) came in at 0.4%. Marina Walsh, vice president of industry analysis at MBA, said current equity cushions and broader borrower credit profiles have kept performance strong.
Outlook for the remainder of 2026 depends on the Fed's path. If short-term rates decline as most market participants expect, HELOC borrowing costs would fall incrementally, supporting continued volume growth. Sandberg projected full-year 2026 HELOC originations at $285 to $310 billion, compared with $232 billion in 2025.
