Home Equity Lending Market Size to grow by USD 35535.04 million between 2023-2027
According to a research report “ Home Equity Lending Market” by Distribution Channel (Offline, Online) Geography (North America, Europe, APAC, South America, Middle East and Africa)- Global Forecast to 2027 published by Technavio, the market size is estimated to grow by USD 35535.04 million, at a CAGR of 3.81% during the forecast period. In the real estate sector, house prices experienced a significant surge in 2020, with an average increase of over 5% in most countries. Notably, Luxembourg, Turkey, New Zealand, and Canada recorded the highest price growth. The housing market in North America witnessed a remarkable 15% average price increase, while cities in the APAC region registered a more modest 9% annual price increase, according to the latest data from the Global Residential Cities Index in Q4 2021. This upward trend in property values will enable homeowners to tap into their home equity as they become more asset-rich. The enhanced property value serves as a substantial collateral margin, making homeowners eligible for home equity loans.
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By Distribution Channel, the Offline segment is projected to dominate the market size in 2024
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By Geography, North America segment is expected to hold the largest market size for the year 2024
In the realm of home equity lending, mortgage and credit unions serve as trusted and prudent options for consumers. To mitigate potential scams and secure favorable rates, it is imperative to partner with a reputable lender. Credit unions, in particular, offer a multitude of financial services, including consumer loans, deposit management, checking and savings accounts, and house loans. These institutions provide user-friendly services and accessible human assistance to navigate the intricacies of finance. Moreover, credit unions are renowned for providing competitive rates on credit products, such as mortgages, ensuring optimal value for members.
North America is forecasted to hold the largest market size by region in 2024
In the global home equity lending market, North America holds a substantial position in 2022, driven by the substantial increase in home values. This trend presents a noteworthy growth opportunity for banks and credit unions, with home equity loans and lines of credit becoming increasingly popular. In Canada, homeowners are utilizing their properties as collateral, fueled by escalating real estate values and fewer regulatory constraints. The seasonally adjusted balance of Home Equity Lines of Credit (HELOC) in Canada reached USD 128 billion in February 2022, representing a 1% increase. Residential mortgages account for 74% of Canadian household debt, while lines of credit comprise 16%, and credit cards account for 4%. These financial instruments significantly contribute to net worth.
The Home Equity Lending Market growth and forecasting report also includes detailed analyses of the competitive landscape of the market growth and forecasting and information about 20 market companies, including:
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Research Analysis Overview
The home equity lending market refers to loans that allow borrowers to access the equity they have built up in their residential real estate. This type of loan is popular for funding home improvement projects, paying off high-interest debt, or obtaining a lump sum amount for various reasons. Credit unions and banks offer home equity loans, with the loan value typically based on the property's value and the borrower's outstanding mortgages. Regulatory restrictions and monetary authorities' interest rate decisions can impact the home equity lending market. Real estate values, housing prices, and inflation also play a significant role. Borrowers should consider the tax deduction benefits of home equity loans and the potential for interest rate fluctuations when evaluating these loans. Collateral, in the form of the residence or residential spaces, secures these loans. Homeowners can access their home equity through a second mortgage or a home equity line of credit. However, it is essential to consider the risks associated with these loans, including the potential for property devaluation and the possibility of making interest payments for an extended period. Homeowners should carefully evaluate their financial situation and consult with a financial advisor before pursuing a home equity loan.
Market Research Overview
The home equity lending market refers to the provision of borrowings against the value of housing units, allowing homeowners to access funds for various purposes, including housing infrastructure development, credit card debt, lines of credit, and home improvement projects. The borrowings are secured against the homeowner's equity in their property, with interest payments due over an agreed period. The market has grown significantly due to the increasing population and nuclear families' need for funds. Real estate values have risen, increasing homeowner equity, and technology-savvy homeowners now prefer digitalization and automation in the loan origination process. Margin requirements, closing costs, and monthly payments vary, depending on the type of loan, such as reverse mortgages, cash-out refinancing, or second mortgages. Lenders, including banks and credit unions, use technology like cloud banking software and regulatory restrictions to mitigate risk. Homeowners can access fixed-rate loans, lines of credit, or a lump sum amount, depending on their needs. Home improvement projects and consumer debt are common uses for home equity loans, but homeowners must consider the impact on their mortgage balance, outstanding debts, and tax deductions. Real estate prices, inflation, and monetary authorities' interest rate decisions also influence the home equity lending market. Homeowners must balance the benefits of accessing funds against the risks, including the potential for high-interest debt and the impact on their residence's value.
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