Are HELOCs a good idea right now?
Lower interest rates
While home-loan interest rates overall have risen dramatically since 2022, HELOC rates still tend to be lower than those on credit cards and personal loans. If you qualify for the best rates, a HELOC can be a less expensive way to consolidate debt or finance a home renovation.
How popular are HELOCs?
Why HELOCs are becoming more popular. According to the Federal Reserve Bank of New York, during the first quarter of 2023, balances on HELOCs "increased by $3 billion, the fourth consecutive quarterly increase following a nearly 13-year declining trend; the outstanding HELOC balance stands at $339 billion."
What is the future of HELOCs?
The bottom line
While some experts expect rates to decline throughout the next year, others are expecting home equity rates to hit double-digit figures by the end of 2024. So, if you're considering a home equity loan or HELOC right now, it could be a good time to capitalize on the current rates being offered.
Why is no one offering HELOC?
It was just two short years ago that several major banks stopped offering HELOCs or home equity lines of credit. Wells Fargo and JP Morgan Chase were the most notable lenders who cited an uncertain economy in the early days of the Covid-19 pandemic as the rationale for hitting the pause button on home equity loans.