Enjoy complimentary customisation on priority with our Enterprise License!
The home equity lending market size is forecast to increase by USD 45.14 billion, at a CAGR of 4.6% between 2023 and 2028. While home prices soar, the allure of home equity loans is underscored by their benefits. Tax deductions for interest payments fuel market expansion, yet concerns about property loss and substantial closing costs linger. The growth trajectory encounters obstacles due to lengthy procedures, impeding accessibility. Despite escalating prices, home equity loans offer homeowners financial flexibility and potential tax advantages. However, apprehensions regarding property security and the financial burden of closing costs temper enthusiasm. Procedural complexities further hinder growth, necessitating streamlined processes to enhance accessibility. Amidst these challenges, the appeal of leveraging home equity remains strong, highlighting the need for transparent lending practices and efficient procedures to maximize the benefits for homeowners.
For More Highlights About this Report, Request Free Sample
The Market refers to the financial industry segment that allows borrowers to access the equity they have built up in their residences. This type of lending is an essential risk mitigation strategy for monetary authorities to stabilize housing markets during periods of inflation. Homeowners can borrow against their loan value, which is the difference between the current market value of their property and the outstanding mortgages. The interest rate for home equity loans is typically higher than primary mortgages. Borrowers can use the funds from home equity loans for various purposes, including home improvements, high-interest debt consolidation, or tax deductions on interest payments. Monetary authorities may impose regulatory restrictions on home equity lending to prevent over-leveraging and maintain financial stability. Real estate values, interest rates, and borrowers' creditworthiness significantly impact the market. Banks and credit unions are the primary providers of home equity loans. Homeowners can choose between a second mortgage or an equity line of credit, depending on their borrowing needs and preferences. Home improvement projects and cash requirements are common reasons for accessing home equity loans. However, it is crucial for borrowers to consider the long-term implications of taking on additional debt.
The market experiences robust growth propelled by the substantial increase in home prices worldwide. The global housing market experienced significant price growth in 2020, with Luxembourg, Turkey, New Zealand, and Canada leading the way. Notably, North American cities saw an average increase of 15%. As property values rise, homeowners can leverage their equity through collateral-backed home equity lending. Monetary authorities monitor inflation and regulatory restrictions to mitigate risk. Homeowners can access a larger loan value due to increased property values, enabling home renovation or debt consolidation. Fixed-rate loans, second mortgages, reverse mortgages, and cash-out refinancing are popular options.
Moreover, Service providers include banks and credit unions. Homeowners can receive a lump sum amount or make monthly payments, with interest payments and closing costs factored into loan payments. It can provide cash for home improvements or outstanding mortgages, offering potential tax deductions. However, it's essential to consider the risks associated with home equity loans, including interest rate fluctuations and potential impact on outstanding mortgage balances. Cloud banking software facilitates the online application process.
An increase in residential properties is a major market trend. The housing sector in India has witnessed significant expansion due to the rising population, demand for residential and commercial areas, and the shift towards remote work. This has led to an increased need for larger homes, resulting in a housing shortage of 10 million units. Monetary authorities have turned to home equity lending as a risk mitigation strategy, allowing homeowners to borrow against their property's equity. Housing prices and loan values have risen, leading to higher interest rates.
Moreover, banks and credit unions offer various home equity loan products, including fixed-rate loans, second mortgages, and reverse mortgages. Homeowners can use these loans for home renovations, debt consolidation, or cash-out refinancing. Regulatory restrictions and cloud banking software ensure secure and efficient loan processing. Thus, such factors will drive the growth of the global market during the forecast period.
Fear of losing property and fear of home security is a major market challenge faced by many. In the real estate sector, home equity lending refers to the process of borrowing money against the value of a homeowner's equity. This involves using the property as collateral for the loan. The lending process can take anywhere from two weeks to two months due to various factors. These include the verification of mortgage statements, property tax bills, proof of income, credit scores, debt-to-income ratio, and the appraisal of the property's value.
Moreover, monetary authorities and regulatory restrictions also play a role in the timeline. Interest rates for home equity loans are influenced by housing prices, inflation, and the borrower's financial situation. Service providers, such as banks and credit unions, offer various types of home equity loans, including fixed-rate loans and adjustable-rate loans. Consumers may use the lump sum amount for home renovations, paying off consumer debt, or other expenses. Such factors may challenge the growth of the global market during the forecast period.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
U.S. Bancorp - The company offers home equity lending which is suitable for home improvements, debt consolidation, weddings and celebrations, and education
The market research and growth report also includes detailed analyses of the competitive landscape of the market and information about key companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market share growth of the mortgage and credit union segment will be significant during the forecast period. In the market, collateral comes in the form of residential real estate, including housing spaces and residential properties. Monetary authorities implement regulatory restrictions to mitigate risks associated with housing prices and loan value. Homeowners can access equity through various loan products, such as second mortgages, reverse mortgages, or cash-out refinancing.
Get a glance at the market share of various regions Download the PDF Sample
The mortgage and credit union segment accounted for USD 79.42 billion in 2018. Interest rates on these loans can be influenced by inflation and consumer debt levels. Service providers, including banks and credit unions, offer fixed-rate loans and online applications for homeowner equity access. These factors will positively effect the market growth.
For more insights on the market share of various regions Download PDF Sample now!
North America is estimated to contribute 50% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. Technology-savvy homeowners have increasingly turned to home equity loans and lines of credit as a means to access funds for various purposes, including home improvement projects and high-interest debt consolidation. This trend is driven by rising real estate values and fewer regulations. In Canada, the balance of home equity lines of credit (HELOC) reached USD 128 billion in February 2022, representing 16% of the total household debt. Mortgages accounted for 74% of this debt, while lines of credit and credit cards accounted for 4% and 16%, respectively. The loan origination process is undergoing digitalization and automation, with artificial intelligence playing an increasingly significant role. Such factors will contribute to the growth of the regional market during the forecast period.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion " for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
You may also interested in below market reports:
Home equity lending refers to the practice of borrowing money using the equity in a home as collateral. This type of loan is popular among homeowners who wish to access funds for various reasons, such as home improvements, debt consolidation, or major purchases. The market plays a significant role in the market, as home values impact the amount of equity homeowners can access. Homeowners can choose from various types of home equity loans, including lines of credit, closed-end home equity loans, and home equity reverse mortgages. Prospective borrowers should consider their financial situation, including their income, debt, and credit score, before applying for a home equity loan. Home equity lending institutions provide services such as pre-approval, loan application, and loan servicing. Homeowners seeking to tap into their home equity should research and compare different lenders and loan options to find the best fit for their needs. It can be an effective way for homeowners to access funds for important expenses, but it's essential to understand the risks and responsibilities involved.
Moreover, in the market, stakeholders navigate various factors to mitigate risks and optimize loan values and interest rates. Monetary authorities monitor inflation, influencing housing space dynamics and regulatory restrictions. Cloud banking software facilitates homeowner equity access for home renovations, with lump sum amounts aiding in debt consolidation. Fixed-rate loans offer stability, while service providers cater to technology-savvy homeowners with digitalization and automation. Artificial intelligence streamlines the loan origination process, benefiting lenders and borrowers alike. Home equity lending supports home improvement projects and tackles high-interest debt, including credit card debt. With a focus on residential mortgage debt and household finances, the market thrives on innovation, data-driven solutions, and strategic risk management to meet evolving consumer needs and market demands.
|
Market Scope |
|
|
Report Coverage |
Details |
|
Page number |
162 |
|
Base year |
2023 |
|
Historic period |
2018 - 2022 |
|
Forecast period |
2024-2028 |
|
Growth momentum & CAGR |
Accelerate at a CAGR of 4.6% |
|
Market growth 2024-2028 |
USD 45.14 billion |
|
Market structure |
Fragmented |
|
YoY growth 2023-2024(%) |
4.18 |
|
Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
|
Performing market contribution |
North America at 50% |
|
Key countries |
US, China, Japan, Germany, and France |
|
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
|
Key companies profiled |
A and A Dukaan Financial Services Pvt. Ltd., ABC Finance Ltd., Australia and New Zealand Banking Group Ltd., Bank of America Corp., Barclays PLC, City Holding Company, Commonwealth Bank of Australia, HSBC Holdings Plc, JPMorgan Chase and Co., Morgan Stanley, Navy Federal Credit Union, nbkc bank, Pentagon Federal Credit Union, Police and Nurses Ltd., Regions Financial Corp., State Bank of India, The Goldman Sachs Group Inc., THE PNC FINANCIAL SERVICES GROUP INC., U.S. Bancorp, and Wells Fargo and Co. |
|
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for market forecast period |
|
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Source
7 Market Segmentation by Distribution Channel
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
Get lifetime access to our
Technavio Insights
Quick Report Overview:
Cookie Policy
The Site uses cookies to record users' preferences in relation to the functionality of accessibility. We, our Affiliates, and our Vendors may store and access cookies on a device, and process personal data including unique identifiers sent by a device, to personalise content, tailor, and report on advertising and to analyse our traffic. By clicking “I’m fine with this”, you are allowing the use of these cookies. Please refer to the help guide of your browser for further information on cookies, including how to disable them. Review our Privacy & Cookie Notice.
Get the report (PDF) sent to your email within minutes.