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.
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