IDEAS home Printed from https://ideas.repec.org/p/fip/fednls/98633.html
   My bibliography  Save this paper

Mortgage Lock‑In Spurs Recent HELOC Demand

Author

Abstract

Mortgage balances, the largest component of U.S. household debt, grew by only $77 billion (0.6 percent) in the second quarter of 2024, according to the latest Quarterly Report on Household Debt and Credit from the New York Fed’s Center for Microeconomic Data. This modest increase reflects a substantial slowdown in mortgage origination; only $374 billion was originated during the second quarter, compared to an average of about $1 trillion per quarter between 2021 and 2022. Meanwhile, after nearly thirteen years of decline, balances on home equity lines of credit (HELOC) have begun to rebound, gaining 20 percent since bottoming out at the end of 2021. In this post, we consider the factors behind this upswing, finding that HELOCs have likely become an attractive alternative to cash-out refinancings amid higher interest rates.

Suggested Citation

  • Andrew F. Haughwout & Donghoon Lee & Daniel Mangrum & Joelle Scally & Wilbert Van der Klaauw, 2024. "Mortgage Lock‑In Spurs Recent HELOC Demand," Liberty Street Economics 20240806, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednls:98633
    Note: This analysis and the Quarterly Report are based on the New York Fed’s Consumer Credit Panel, which is comprised of credit report data from Equifax.
    as

    Download full text from publisher

    File URL: https://libertystreeteconomics.newyorkfed.org/2024/08/mortgage-lock-in-spurs-recent-heloc-demand/
    File Function: Full text
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Consumer Credit Panel (CCP); HELOC; Home equity lines of credit;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fednls:98633. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gabriella Bucciarelli (email available below). General contact details of provider: https://edirc.repec.org/data/frbnyus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.