In 2025, HELOC originations accounted for roughly only 7% of all mortgage originations nationwide. While that share remains modest compared to traditional mortgage activity, the rebound since 2021 highlights a structural shift in how homeowners are accessing equity. This shows that HELOCs are often underutilized financial products that could be tapped more widely nationwide as home prices rise, and many Americans are starting to catch on.
When homeowners talk about tapping home equity, the conversation often focuses on individual decisions: remodeling a kitchen, consolidating debt, or covering a significant expense. Over the past several years, U.S. homeowners have built record amounts of home equity. This, combined with rising interest rates, has made HELOCs more attractive.
From 2018 through 2025, HELOC activity followed a distinct trajectory. While originations dipped during the low-rate refinancing boom of 2020, they surged sharply as rates climbed and refinancing became less viable.
At the same time, the amount of equity homeowners were approved to access increased substantially.
The Overlooked Role of HELOCs in Household Finance
During periods of low interest rates, refinancing tends to dominate discussions about home equity. But HELOCs occupy a different role. They allow homeowners to access equity without refinancing their existing mortgage, often offering greater flexibility than traditional refinancing.
That flexibility becomes especially important in past higher-rate environments, when refinancing may no longer make sense. In those conditions, HELOCs often serve as a bridge, providing access to equity for home improvements, major expenses, or financial flexibility without disrupting an existing low-rate mortgage. With today’s environment of slightly rising rates, HELOCs have their place as a great mortgage tool.
Rising Home Prices Expanded Borrowing Power
The increase in approved HELOC credit limits closely tracks the surge in home values over the same period.
While higher home prices have made it more difficult for first-time buyers to enter the market, they have also increased the equity of existing homeowners. Across the nation, that increased equity has translated into greater access to credit through HELOCs. Between 2018 and 2025:
- The total approved HELOC credit in the United States rose from $41 billion to $68 billion, an increase of 66%.
- Median home values increased from $231,693 to $359,137, a rise of 55%, according to Zillow.
Still, the number of originations is increasing (the total number of originations has increased by 18% since 2018), so some borrowers are starting to see the equity potential, but it is disproportionate to the growth in their equity.
While this percentage increase gap, where home values are underpacing HELOC amounts, is noticeable, in Madison, WI, the metro with the highest HELOC usage per 10,000 owner-occupied homes, the gap is much larger. Between 2018 and 2025:
- The total approved HELOC credit in Madison rose from $258,865,000 to $488,785,000, an increase of 88%.
- The median home value increased from $270,912 to $429,933, a 58% rise, according to Zillow.
While there is more of a gap present on a case-by-case, MSA view, indicating there is more at play than just increased home prices, on a year-to-year basis, the HELOC amount approved follows in step with home price increases.
Nationwide HELOC Trends
| Year | Number of Nationwide HELOC Originations | Total Approved HELOC Credit Limit |
| 2018 | 427,020 | $41,156,490,000 |
| 2019 | 409,306 | $39,595,770,000 |
| 2020 | 333,160 | $33,546,400,000 |
| 2021 | 398,314 | $43,069,340,000 |
| 2022 | 610,042 | $74,049,250,000 |
| 2023 | 453,223 | $52,281,985,000 |
| 2024 | 456,186 | $56,033,100,000 |
| 2025 | 504,708 | $68,423,380,000 |
HELOC originations increased dramatically between 2021 and 2022, rising by more than 50% year over year. Total approved HELOC credit limits nearly doubled between 2020 and 2022.
Even as originations cooled from their 2022 peak, approved credit levels in 2025 remained substantially higher than pre-pandemic levels.
Nationally, the average approved HELOC credit limit rose to $135,570 in 2025, up $39,189 from 2018.
This shift reflects more than borrower preference; it reflects home price appreciation.
Why HELOCs Gained Momentum as Refinancing Slowed
During 2020 and 2021, homeowners seeking to access equity often opted for traditional refinancing. Rate-and-term and cash-out refinances offered a compelling opportunity to lower mortgage rates while accessing cash.
But as mortgage rates climbed in 2022, refinancing activity declined sharply. Many homeowners held onto historically low-rate first mortgages. Instead of replacing those loans, HELOCs became an alternative way to access equity without disrupting favorable terms.
This shift is visible in the data:
- HELOC originations increased from 398,314 in 2021 to 610,042 in 2022.
- Total approved HELOC credit limits rose from $43.0 billion to $74.0 billion in that same period.
This trend may have taken a back seat near the end of 2025 and the start of 2026 as rates dropped significantly, but this home equity tapping tool should still be a viable option while rates have since risen higher above 6%.
What Is a HELOC and How It’s Different From Refinancing
A home equity line of credit, or HELOC, allows homeowners to borrow against the equity they’ve built in their home without replacing their existing mortgage. Unlike a traditional refinance, which pays off the original loan and creates a new one, a HELOC sits alongside the first mortgage and functions more like a revolving line of credit, like a credit card. A HELOC is technically classified as both a second mortgage and a lien on the property.
HELOCs typically have a draw period, during which homeowners can borrow and repay funds up to an approved credit limit, followed by a repayment period when borrowing stops, and the remaining balance is paid down. Interest rates on HELOCs are usually variable, meaning payments can change over time as rates move.
This structure makes HELOCs fundamentally different from cash-out refinances or closed-end home equity loans. Rather than locking borrowers into a new long-term mortgage, HELOCs offer flexibility, which is why they are often used for home improvements, significant expenses, or short-term financial needs. In higher-rate environments, HELOCs can also be appealing to homeowners who want to preserve a low-rate first mortgage while still accessing equity.
Because HELOCs serve a different purpose than refinancing, their usage patterns reveal a distinct layer of homeowner behavior that isn’t visible in traditional mortgage data.
Why HELOCs Are Often Cheaper Than Credit Cards for Large Expenses
For many homeowners, major expenses like renovations, repairs, or unexpected costs are often paid for with credit cards. While credit cards offer convenience, they typically come with some of the highest interest rates in consumer finance.
By contrast, HELOC interest rates are generally much lower than credit card rates because a home secures them. Over the last 30 years, the weekly average HELOC rate has risen above 10% only once, at the end of 2023, according to Bankrate, and has since hovered closer to 7%. Meanwhile, traditional credit card interest rates have routinely been above 15% and often above 20% since COVID-19. While HELOC rates are usually variable and can change over time, they have historically remained well below average credit card interest rates.
That difference helps explain why HELOCs are commonly used as an alternative to credit cards for larger, planned expenses. Rather than carrying high-interest revolving debt, some homeowners use HELOCs to spread costs over time (often a 5-10 year draw period and a 10-20 year payment period) at a lower interest rate, particularly when they want to avoid refinancing an existing low-rate mortgage.
Where HELOC Usage Is Most Concentrated
Not all markets tapped expanded equity equally.
When adjusted for owner-occupied housing stock, certain metro areas stand out for their HELOC usage intensity.
Top Metros by HELOCs per 10,000 Owner-Occupied Homes (2025)
| MSA Name | Number of HELOC Originations per 10,000 Owner-Occupied Homes in 2025 | Average Approved HELOC Credit Limit in 2025 |
| Madison, WI | 254 | $106,605 |
| Janesville-Beloit, WI | 176 | $77,514 |
| Provo–Orem–Lehi, UT | 175 | $152,685 |
| Ogden, UT | 169 | $129,399 |
| Iowa City, IA | 129 | $83,328 |
| Bend, OR | 129 | $126,920 |
| Coeur d’Alene, ID | 123 | $155,845 |
| Lexington-Fayette, KY | 123 | $119,872 |
| Kalamazoo-Portage, MI | 122 | $94,849 |
| Idaho Falls, ID | 122 | $105,599 |
To avoid overrepresentation of any single state, each state is capped at 2 metros. Utah and Wisconsin had multiple metros ranking near the top, underscoring concentrated HELOC usage in those regions.
Many of the metros ranking highest for HELOC usage share several characteristics: above-average homeownership rates, steady home price appreciation since 2018, and strong household formation. While home values increased in many parts of the country, in markets like Madison, Provo, and Raleigh, those equity gains have translated more directly into HELOC activity. In other words, it’s not just that homeowners gained equity, it’s that they chose to access it.
State-Level HELOC Intensity
| State Name | Number of HELOC Originations per 10,000 Owner-Occupied Homes in 2025 | Average Approved HELOC Credit Limit in 2025 |
| Alaska | 20 | $101,418 |
| Alabama | 47 | $97,531 |
| Arizona | 70 | $137,446 |
| Arkansas | 37 | $101,418 |
| California | 55 | $195,391 |
| Colorado | 78 | $141,972 |
| Connecticut | 73 | $173,837 |
| Delaware | 76 | $128,410 |
| District of Columbia | 46 | $207,244 |
| Florida | 44 | $140,645 |
| Georgia | 51 | $132,188 |
| Hawaii | 76 | $217,533 |
| Idaho | 103 | $131,456 |
| Illinois | 41 | $111,487 |
| Indiana | 74 | $93,754 |
| Iowa | 58 | $75,550 |
| Kansas | 48 | $98,891 |
| Kentucky | 62 | $99,134 |
| Louisiana | 16 | $107,672 |
| Maine | 57 | $124,235 |
| Maryland | 61 | $131,062 |
| Massachusetts | 93 | $201,714 |
| Michigan | 66 | $105,589 |
| Minnesota | 51 | $111,505 |
| Mississippi | 30 | $88,076 |
| Missouri | 48 | $95,509 |
| Montana | 49 | $128,058 |
| Nebraska | 51 | $86,156 |
| Nevada | 49 | 125,941 |
| New Hampshire | 101 | $160,973 |
| New Jersey | 77 | $190,154 |
| New Mexico | 20 | $96,180 |
| New York | 58 | $154,540 |
| North Carolina | 83 | $132,509 |
| North Dakota | 33 | $92,447 |
| Ohio | 85 | $99,463 |
| Oklahoma | 29 | $88,472 |
| Oregon | 92 | $110,141 |
| Pennsylvania | 76 | $122,371 |
| Rhode Island | 138 | $166,729 |
| South Carolina | 44 | $150,630 |
| South Dakota | 33 | $97,012 |
| Tennessee | 55 | $127,292 |
| Texas | 11 | $153,647 |
| Utah | 142 | $146,687 |
| Vermont | 72 | $120,553 |
| Virginia | 69 | $138,965 |
| Washington | 88 | $147,403 |
| West Virginia | 24 | $80,166 |
| Wisconsin | 111 | $97,719 |
| Wyoming | 37 | $116,541 |
At the state level, Utah, Rhode Island, and Wisconsin show the highest HELOC originations relative to owner-occupied homes. Full state-level rankings are included above.
Interestingly, some large states, such as Texas, rank significantly lower per home despite high total housing volume. This suggests that HELOC usage is shaped more by ownership structure and equity positions than by population alone. States with higher homeownership rates and steady home price appreciation tend to have a larger share of households with accumulated equity, creating more opportunities to open a HELOC. By contrast, markets with larger renter populations or different borrowing preferences may generate high total loan activity but lower HELOC penetration per homeowner.
How Homeowners Are Positioning HELOCs
HMDA data includes lender-reported loan-purpose classifications, which provide directional insight into how HELOCs are positioned across regions.
Nationally, HELOCs are most commonly reported under home improvement or refinance-related categories, though the balance between these uses varies meaningfully by geography. In some regions, HELOCs are more tightly associated with renovations and property upgrades. In others, they serve a broader role tied to financial flexibility or balance sheet management.
For example, many areas in Texas, such as Texarkana, College Station, and Abilene, show a higher share of HELOCs reported, more than 95%, for home improvement purposes, while smaller areas like Wausau, WI, Jackson, MI, and Monroe, LA, have a larger share, more than 55%, categorized under refinance-related uses. These differences likely reflect variations in housing age, renovation needs, and local financial behavior rather than strict borrower intent.
What This Means
Home price growth has expanded borrowing capacity for existing homeowners. As refinancing became less attractive, HELOCs emerged as a flexible alternative.
With increased access to hard-earned or lucky-timed home equity, homeowners are now poised to use a HELOC to improve their home for increased resale value, finance large purchases like a new automobile, or even put a down payment on another house.
Methodology
This study analyzes Home Mortgage Disclosure Act (HMDA) data from 2018 through 2025. HELOCs were identified using the open-end line of credit designation and limited to originated, subordinate, conventional loans on single-family properties.
HELOC activity was normalized using owner-occupied housing estimates from the U.S. Census Bureau’s 2025 American Community Survey.
Approved HELOC values reflect credit limits, not funds drawn or outstanding balances.
Home value comparisons use Zillow Home Value Index data for metro-level median home prices.
