Home equity line of credit originations are in the midst of a comeback, fueled by the rise in home prices, according to a white paper released by Experian.
As of the fourth quarter of 2015, HELOC originations were at $43.03 billion, 111% higher than five years earlier, Experian reported in the paper released Thursday. Meanwhile, only 0.49% of consumers with an open HELOC were between 90 and 180 days past due, in line with pre-recession levels.
Experian also estimated that roughly $29 billion in HELOC debt originated between 2005 and 2008 has been paid down over the past year, a reflection of the fact that many of these lines of credit are entering repayment. But those who were delinquent on their HELOCs were more likely to be delinquent on other loans, such as auto loans or bank cards, Experian found in its research.
"During the housing boom, home equity lending was heating up, but lenders pulled back significantly as home prices began to fall," Michele Raneri, Experian's vice president of analytics and new business development, said in a news release.
"What we're seeing now is that home values have recovered, but the end of draw is still a factor that needs to be considered when it comes to consumer and lending behavior."
Experian also found that consumers who have a HELOC were more like to close and to open other HELOCs or mortgages in the next year.