Home equity lines grew by the most since 2005 as household debt reached $19.1 trillion

Balances on home equity lines of credit (HELOCs) rose by $23 billion in the third quarter of 2026, the largest increase since 2005, as total US household debt reached $19.1 trillion, according to the Federal Reserve Bank of New York's Quarterly Report on Household Debt and Credit. It was the 18th straight quarterly rise in HELOC balances.

The quarter in four numbers

Total household debt grew by $334 billion, or 1.8%, from the second quarter, the New York Fed said. Mortgage balances rose by $257 billion to $13.4 trillion, about half of it a re-reporting of balances after a reporting gap in the previous quarter. Non-housing debt grew by $55 billion, or 1.1%.

Mortgages account for 76.9% of the quarter's increase (computed from $257 billion and $334 billion), and the bank says part of that is a reporting effect rather than new borrowing. HELOC balances, which rose by $23 billion, now total $481 billion. A HELOC is a revolving line of credit secured by a home, from which the borrower chooses when and how much to draw up to a limit, the report's data dictionary says.

How the line compares with the quarter before

In the second quarter, HELOC balances rose by $13 billion, the 17th consecutive increase, to $459 billion, which the report said was $142 billion above the low reached in the first quarter of 2022. The third-quarter increase of $23 billion is 1.8 times that (computed).

Credit limits are growing too. HELOC limits rose by $31 billion, or 2.9%, in the third quarter, "continuing an expansion in HELOCs that began in 2022," against a $19 billion rise in the second. Credit card limits rose by $115 billion, or 2.1%.

Measured from the 2022 low, the HELOC balance has grown by $164 billion (computed from the $481 billion balance and a low of $317 billion, derived as $459 billion less $142 billion).

Originations rose even with the 30-year rate well above last year

Mortgage originations, which include purchase and refinance loans, were $595 billion in the third quarter, up from $505 billion in the second, the New York Fed said. That is $90 billion more, or 17.8% (computed). The credit quality of new mortgages was slightly worse, with the 25th and 10th percentile credit scores falling by six and three points.

Freddie Mac's weekly survey put the 30-year fixed-rate mortgage at an average of 7.18% as of November 5, 2026, against 6.22% a year earlier, a difference of 0.96 percentage point (computed). The reports do not say how much of the HELOC growth reflects borrowers choosing to draw on equity instead of taking a new first mortgage at that rate.

Delinquency rose as balances grew

At the end of September, 5.0% of outstanding debt was in some stage of delinquency, up 0.3 percentage point from the previous quarter, the bank said. Transitions into early delinquency continued to rise for auto loans and mortgages and improved slightly for credit cards. The share of student loan balances 90 or more days past due increased to 10.9% from 10.6%.

About 62,000 people had new foreclosures on their credit reports, up from about 55,000 in the second quarter, a rise of about 12.7% (computed). About 135,000 consumers had a bankruptcy notation added in the third quarter, a slight decrease from the previous quarter. The share of consumers with a third-party collection account stayed at 4.9%.

For home equity lines specifically, the report said transition rates into serious delinquency "remained flat" in the third quarter. It gives no HELOC delinquency rate in text; the figure appears only in a chart.

What the data do not show

The report does not say why borrowers are drawing more on their homes, and the balances do not separate lines used for renovations from lines used to pay other debts. It also does not report how many HELOCs carry variable rates or what interest rate borrowers pay on them, so the cost of this borrowing cannot be read from the data. Later quarterly reports would show whether the growth continued.

FinanceInTime has covered other pieces of the household balance sheet in recent weeks, including debt payments and the saving rate, deposit rates against Treasury yields and card and student-loan delinquencies.

Equity is becoming the household's spare balance sheet, and that has a price

We think the HELOC figures show households turning to the asset they already own while a new first mortgage costs more than it did a year ago. The facts above support the direction: balances up for 18 quarters, limits expanding since 2022, a first-mortgage rate 0.96 percentage point above last year's and a delinquency rate that rose to 5.0%. Our reading is that a line of credit is useful flexibility for some households and an added claim on the home for all of them.

The threat is a squeeze on households that borrow against their homes while real hourly pay was flat in October and delinquencies are creeping up; the opportunity is that equity gives some households access to credit without taking a new first mortgage at a 7.18% rate. We expect HELOC balances to keep rising next quarter if the 30-year rate stays well above last year's level, and we would watch whether serious delinquencies on lines, now flat, begin to rise. A fall in HELOC limits or balances for two quarters would prove this reading wrong.

The view in this final section is FinanceInTime's editorial opinion, for information only. It is not investment, tax, legal or other advice, and it does not take your circumstances into account. Forecasts are uncertain and past results do not guarantee future ones.