Why Homeowners Are Seeking HELOCs 

Home prices in many areas of the nation have risen dramatically since the start of the pandemic in mid-2020, resulting in many homeowners seeing the amount of equity they have in their homes increase.  

According to LendingTree Senior Economic Analyst Jacob Channel, there are many reasons why someone would consider tapping their home’s equity. An average of 23.96% of homeowners have considered improving their home’s equity to help consolidate some form of debt. Home equity lines of credit (HELOC) often come with lower rates than other types of financial responsibility like credit cards, as using one to pay off high-cost debt can help borrowers save money. 

Using a home’s equity for non-home improvement investment purposes was the primary goal for an average of 9.16% of homeowners. Only 1.43% of consumers considered using their home’s equity as retirement income. Retirees who’ve generated considerable equity in their home might show interest in tapping into it as a temporary means boost to their income. 

As data analyzed home equity loans or HELOC offers made by lenders to LendingTree users throughout 2021, LendingTree was able to determine how popular each of these reasons were across the nation’s 50 largest metropolitan areas. Primary reasons cited by respondents for taking out a HELOC included: 

• Making home improvements; 
• Consolidating debt; 
• Getting money for non-home improvement investment purposes; 
• Getting extra retirement income; and/or 
• Using the money for another reason. 

On average, 48.59% of people seeking a home equity loan or HELOC across the nation’s 50 largest metros reported home improvements as the primary reason for tapping into their home equity—the most popular reason given in every metro according to LendingTree. 

A significant percentage of homeowners, an average of 16.85%, have considered a home equity loan or HELOC for a reason other than those listed above. 

Regionally, the study found the metros with the largest share of homeowners tapping into their home equity for home improvements were: 

• Boston, Massachusetts (54.33%) 
• Philadelphia, Pennsylvania (52.96%) 
• Milwaukee, Wisconsin (52.78%) 

Metros where the largest share of homeowners were tapping into their home equity for debt consolidation included: 

• Las Vegas, Nevada (31.82%) 
• Phoenix, Arizona (28.27%) 
• Louisville, Kentucky (28.04%) 

Metros where the largest share of homeowners considered tapping home equity for non-home improvement investment purposes included: 

• San Jose, California (16.95%) 
• Miami, Florida (14%) 
• Austin, Texas (13.08%) 

Metros that found the largest share of homeowners reaching into their home equity for retirement income: 

• Las Vegas, Nevada (2.50%) 
• Los Angeles, California (2.16%) 
• Miami, Florida (2.08%) 

Metros where the largest share of homeowners considered tapping home equity for another reason: 

• San Jose, California (24.13%) 
• Los Angeles, California (21.11%) 
• San Francisco, California (21.05%) 

Click here for more information on LendingTree’s HELOC analysis.