With rising mortgage rates, homeowners are less inclined to refinance and are instead using home equity loans and home equity lines of credit (HELOCs) to tap into their equity. According to property information services provider CoreLogic, many homeowners are choosing to keep their low-rate mortgages and opt for these alternatives rather than cash-out refinancing.
By mid-2024, home equity lending hit its highest level since 2008, with more than 333,000 new loans nationwide totaling $23.6 billion. California experienced the largest increase in home equity lending.
So far in 2024, Los Angeles had the highest amount of home equity loans, totaling almost $1.88 billion, an increase almost six-fold from 2023. Anaheim, California followed with $1.02 billion, while San Diego ranked third at $967 million. In general, markets with the largest home price growth over the past few years were among those with the biggest year-over-year gains in home equity loan activity.