40% Up In 2022 For HELOC Production

Mortgage News April 6, 2023

Although there was a decline in the number of home-equity lines of credit issued in the last quarter of 2022 compared to the previous quarter, there was a significant increase in production for the full year, jumping up by 40 percent from the previous year.

According to ATTOM’s report on Thursday, U.S. lenders originated 313,973 home-equity lines of credit amounting to $60.1 billion during Q4 2022. This was lower than Q3 2022, which saw 374,703 HELOCs issued for $72.3 billion.

Despite five of the preceding six quarters reporting an increase in home-equity lending, the most recent quarter experienced a decline when compared to the previous one.

ATTOM CEO Rob Barber commented in the report, stating that even the HELOC sector, which had been performing well earlier in the year due to homeowners utilizing increased equity from the real estate market boom to fund home renovations and other expenses, was impacted by the significant contraction in the lending industry during the fourth quarter. Barber added that the movement of interest rates this year will determine if HELOCs will continue to be a significant portion of overall lending activity or if households will resort to cash-out refinancing deals to fund significant expenses.

ATTOM reported that the Buffalo, New York area had the most significant decline in HELOC originations among metropolitan areas with at least 1 million in population, experiencing a 45.1 percent quarter-over-quarter drop. Following Buffalo was Fresno, California, with a 39.8 percent decline, San Jose, California, with a 38.9 percent decrease, Sacramento, California, with a 35.5 percent reduction, and San Francisco with a 35.2 percent retreat.

However, when compared to the fourth quarter of 2021, the national production of HELOCs increased, with 238,164 units amounting to $47.2 billion issued.

Furthermore, an analysis of ATTOM’s quarterly data reveals that HELOC production for the full year of 2022 surged to 1.290 million loans opened, totaling $250.9 billion, compared to just 0.919 million HELOCs opened for $182.3 billion in all of 2021.

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