An opportunity for brokers to help customers tap into equity
With mortgage holders continuing to keep low-rate notes rather than refinancing or selling their homes, the surge in the popularity of home equity loans has been dramatic over the last couple of years.
Even as rates hit a three-year low on Thursday, some homeowners would rather tap into the built-in equity of their home than work through a refinance or sale.
Despite the surge in home equity loans over the last year, the amount of home equity continues to rise, and one credit executive noted that increase as one of the more interesting data points in a new TransUnion report.
Satyan Merchant (pictured top), SVP of auto and mortgage business leader at TransUnion, said that while he wasn’t surprised to see this information in the latest TransUnion Q4 2025 Credit Industry Insights Report (CIIR), he is amazed that available equity continues to surge.
“It's a story that continues, and maybe it's remarkable how long the story is continuing, and that is the available home equity that consumers have,” Merchant told Mortgage Professional America. “I remember when reporting out on stuff, like two years ago, and the amount of home equity out there was almost 20 trillion. That’s a large amount of home equity, and it just keeps growing.”
‘Two sides of the coin’
TransUnion’s latest data released on Thursday showed that despite an increase in home equity originations in Q4 2025, the available home equity surged to $21.4 trillion. The report also noted that over 100 million Americans have access to that home equity.
While just a 2% increase year over year, that is a 56% increase from the $13.7 trillion available in Q4 2019.
“It’s reflective of two things, one is primarily home values going up, and also the equity continues to grow because consumers are staying current on their mortgages,” Merchant said. “Home equity wouldn’t go up if people aren't paying their mortgage.”
As Merchant noted, one of the reasons for the surge in equity is that home values continue to increase. He said this provides a two-sided challenge in the market, with current homeowners benefiting from available equity, and potential homebuyers still struggling with a high-priced market.
“This story shows that again it's two sides of the coin,” he said. “I think the positive here for mortgage and home equity lenders is that there's a lot of equity that consumers have, and they can still safely tap it if they need access to cash or access to liquidity.
“The high home values do put a bit of a headwind in front of new home purchases, because it's expensive. I think the entire market is looking at if mortgage rates continue to come down, it will help with that affordability question.”
According to the data, home equity originations increased 14.3% year over year to 714,000, which was the sixth consecutive quarter that originations increased. HELOCs rose 15.8% year over year to 352,000. Gen X and Baby Boomers represented the largest borrowing segments at 38% and 30%, respectively.
Forecast looking bright
In addition to Q4 originations, TransUnion also released its 2026 origination forecast. It forecast a 4.0% increase in purchase originations and a 4.2% bump in refinances. It’s the third straight year TransUnion has forecasted increases in both, although the refinance forecast was significantly lower than the 28.1% increase forecasted for 2025.
Only one area of credit saw a decrease in the forecast for 2026, and that was auto loans. TransUnion forecasted a 1.5% decrease in auto loans for 2026.
Merchant said that barring any unforeseen events, he feels like it should be a solid year of growth for the mortgage industry.
“For mortgage, we forecasted roughly the same increase on a year-over-year basis of purchase and refi,” he said. “That’s with refi coming off of two years of pretty material increases. I think the caveat is always, if there's a shock with interest rates, all bets are off. I think ‘poised for growth’ is a good way to say it.”
Affordability is a big topic in Washington, and with two housing bills currently being worked on, Merchant is optimistic that the market is starting a path toward solid growth once again.
“I think that speaks to a recovering housing market,” Merchant said. “It’s a healthy one, but one that still may be challenged. This is being talked about a lot in Washington and even all over the world, with the challenge of the affordability question again. There's only so much a lender can do to help solve that problem.
“Lenders are looking for ways to provide products and offerings to borrowers who are interested in purchasing and refinancing a home. The 4% growth would, I think, speak to that. It’s kind of a healthy number that affirms that we're out of the trough and kind of on a positive swing here.”
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