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Limits on Outstanding HELOCs Up First Time in 15 Years

For the first time in 15 years, banks, credit unions and non-bank lenders managed to grow the collective credit limits on their outstanding home-equity lines of credit.

Aggregate credit limits on HELOCs increased by $14 billion during the fourth quarter of last year, soaring from just a $1 billion rise three months earlier. The latest gain was slightly better than $12 billion in the final quarter of 2021.

That was according to data from the Federal Reserve Bank of New York’s Quarterly Report On Household Debt and Credit.

The latest activity put national HELOC limits collectively at $890 billion in the fourth-quarter 2022, up from $845 billion one year earlier. The last time there was a year-over-year increase in aggregate HELOC limits was in 2007, when the total jumped by $100 billion from 2006 to $1.370 trillion.

HELOC balances closed out last year at $336 billion, expanding for the third consecutive quarter from $322 in the third quarter and $318 billion in the fourth-quarter 2021.

Still, from the second-quarter 2004 until the fourth-quarter 2020, America’s HELOC book was higher than it is now. Balances topped out in the first-quarter 2009 at $714 billion.

The Fed noted that the latest quarter-over-quarter expansion in outstanding HELOC balances was “the largest increase seen in more than a decade.”