HELOC Balances Climb $13 Billion in Q2 2026

The national balance of home equity lines of credit (HELOCs) increased by $13 billion during the second quarter of 2026, reaching a total of $459 billion outstanding. This marks the 17th consecutive quarter of growth for these flexible credit lines, as detailed in a new report from the Federal Reserve Bank of New York. The data is part of the New York Fed’s Quarterly Report on Household Debt and Credit, which tracks various forms of consumer debt, including mortgages, student loans, auto loans, and credit card balances, collectively totaling $18.8 trillion in household debt. Although mortgage balances reported on consumer credit reports decreased by $74 billion to $13.1 trillion by the end of June 2026, the Federal Reserve noted this was due to a reporting gap, and the balance would have otherwise remained stable. In contrast, the amount homeowners have borrowed against their homes through HELOCs has seen a significant rise. The $13 billion increase in the second quarter follows a $12 billion rise in the first quarter of 2026, which brought the total HELOC balance to $446 billion, according to previous New York Fed reporting. The outstanding HELOC balance has seen a substantial increase from a low of $317 billion in the first quarter of 2022. Homeowners are increasingly turning to HELOCs as a strategy to tap into their home equity without having to refinance their existing mortgages at higher interest rates. Realtor.com® senior economist Joel Berner explained that the current environment of elevated mortgage rates makes HELOCs particularly attractive. He stated that while a cash-out refinance would typically result in a new mortgage with an interest rate exceeding 6%, a HELOC provides access to funds without requiring homeowners to relinquish their lower, older mortgage rates. These market conditions are making HELOCs a preferred option, especially for funding home renovation projects. This is particularly relevant given the "lock-in effect," which has discouraged many homeowners from selling their current homes and purchasing new ones, thereby preventing them from taking advantage of potentially lower prices or different market conditions. The "lock-in effect" describes the phenomenon where homeowners are disinclined to move because they wish to retain their current low mortgage interest rates, making home improvement a more appealing alternative to moving.