How much home equity is being tapped by homeowners?

The strong showing of HELOCs has emerged despite the negative stigma the financing tools took during the Great Recession of 2008, Raneri noted. “With the Great Recession, home equity loans of credit in particular, but also HELOANs, got a bad rap because people associated it with over-indebting their homes because they took out a second mortgage on top of their already exaggerated home value,” she said. “Without knowing why, people didn’t like HELOCs for a while.”

Consumers today are savvier, Raneri suggested, and the regulatory oversight into financial products has been bolstered since the days of the Great Recession. “They’re starting to realize their choices, and one of those choices – which can be a good choice – is a HELOC or HELOAN that just a few years ago they felt like that wasn’t something you’re supposed to do. It was just a hangover from what they learned and heard during the Great Recession.”

An interesting offshoot of the TransUnion report is the consumer breakdown of who’s availing themselves of home equity lines of credit. Usage of such financial tools differs generationally, with seniors representing the group most resistant to utilize them despite collectively holding the greatest levels of home equity wealth. The TransUnion report buttresses other findings as it relates to seniors – the so-called Silent Generation.

According to the TransUnion findings, the Silent Generation comprises a mere 9.7% of those utilizing HELOCs. Baby Boomers represent the largest segment, with 46%, followed by Gen X consumers, at 33.5%. Millennials aren’t far from their Silent Generation counterparts, representing a 10.5% share of HELOC activity. For obvious reasons related to youth, the Gen Z generation – those born between 1997 and 2012 who are between the ages of 10 and 25 – don’t show up on the TransUnion HELOC radar.