One week after Hurricane Helene rolled across the Gulf Coast and Southeast United States, we’re...
According to Bankrate, both home equity loans and home equity lines of credit (HELOCs) are on the rise. But it’s not just that more people are borrowing against their equity—they’re also taking out larger loans. Through Q4 of last year, HELOC balances grew for 11 consecutive quarters.
Why is this happening? It goes all the way back to the pandemic era and 0% interest rates.
During the days of near-zero interest rates, Gen Y, which represents approximately 22% of the U.S. population, finally saw an opportunity to enter the residential real estate market—and they did so in droves. At the same time, established homeowners used the opportunity to upgrade their living situations, either by purchasing a new home or completing major renovations. This influx of buyers and upgrades led to rapidly rising home values.
Six years post-pandemic, those home values remain high, despite rising interest rates and a cooling real estate market. Bankrate reports that nearly half of homeowners with mortgages are now equity-rich, meaning their outstanding loan balance is half—or less—of what their home is worth.
According to the March 2025 Intercontinental Exchange (ICE) Mortgage Monitor Report, home equity levels are up 6% year-over-year, and the average homeowner currently has $313,000 of equity available.
It’s no surprise home equity lending is on the rise! But that’s not all—according to Bankrate, interest rates for home equity loans are also declining, making them even more appealing. As of March 27, 2025, the average range for home equity loan rates was between 8.04% and 9.24%.
If you’re seeing an influx of home equity loan and HELOC applications, AFR is here to help.
AFR offers leading valuation tools that help determine market value, meet compliance requirements, reduce closing costs, and shorten the time to close. Our services include property inspections, automated valuation models (AVMs), and desktop appraisals, representing a reliable way to determine collateral value and establish a loan-to-value (LTV) ratio—without needing a full appraisal.
Learn more about AFR’s Valuation Services.
With over 30 years of experience helping lenders navigate mortgage origination and servicing, AFR Services is your go-to partner to increase your look-to-book ratio, streamline operations, and maximize revenue opportunities.
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