Home Equity Borrowing Climbs to $481 Billion

Home equity line of credit balances grew 14% year over year in the third quarter, the fastest account growth since early 2023.

Updated on Nov. 13, 2026 in Home Renovation

Home Equity Borrowing Climbs to $481 Billion

Live Poll

Would you borrow against your home equity to pay for renovations?

Americans' home equity line of credit balances rose to $481 billion in the third quarter, up from $422 billion a year earlier. Home Depot and Lowe's stocks rallied over the past month as analysts expect renovation spending funded by these loans to continue.

Why it matters

Homeowners locked into low mortgage rates are tapping home equity rather than selling, which is fueling renovation demand. Because most of these lines carry variable rates, rising Federal Reserve rates would increase borrowing costs for households.

Home equity line balances reached $481 billion in the third quarter, with 13.35 million open accounts. Current rates are around 7.5%, close to the 7.2% rate on a new mortgage.

The players

Home Depot

Home Depot is a major home improvement retailer whose sales are closely tied to homeowner renovation spending.

Lowe's

Lowe's is a major home improvement retailer that competes directly with Home Depot for renovation and remodeling sales.

Jefferies

Jefferies is an investment bank whose analysts forecast continued home improvement and HELOC-funded spending into 2027.

UBS

UBS is a global investment bank whose analysts expect at least two more Federal Reserve rate hikes.

The details

Most home equity lines have variable rates, so payments rise when the Federal Reserve raises interest rates, and rates have fallen by more than 2.5 percentage points over two years to around 7.5%. Millions of homeowners hold mortgages locked in at lower rates from before 2022, so selling would mean giving up that low rate and encourages borrowing against equity instead.

Early 2003: HELOC balances were about $250 billion before the mid-2000s surge.
2022: HELOC balances bottomed near $320 billion.
Mid-October 2026: Home Depot stock began a 21% rally to $351.31.
Third quarter 2026: HELOC balances reached $481 billion, up $23 billion.

Home Equity Cycle

Home equity line balances tripled from about $250 billion in early 2003 to roughly $700 billion during the financial crisis before bottoming near $320 billion in 2022. Current growth to $481 billion remains well below that earlier peak.

Homeowners considering a renovation funded by a home equity line should weigh the variable rate, since payments rise when the Federal Reserve raises rates. With current rates near 7.5%, a line is only slightly cheaper than a new mortgage at about 7.2%.

The takeaway

Before tapping home equity for renovations, compare the variable line rate with fixed options and plan for payments that could rise if interest rates climb further.