Homeowners tap equity as HELOC balances post biggest jump since 2005: New York Fed report

US homeowners increased their home equity line of credit (HELOC) borrowing by $23 billion in the third quarter, the largest rise since 2005, according to a New York Federal Reserve report. The increase matters because it extends a run of rising balances as homeowners face a sluggish housing market and many are reluctant to move.

HELOC debt reached $481 billion by 30 September, marking its 18th consecutive quarterly increase. Balances previously peaked at about $714 billion in the first quarter of 2009. In the second quarter, 49.1% of outstanding mortgages had interest rates of 4% or lower, which may discourage owners from selling and taking on a new mortgage at higher rates.