Home Equity Originations in 2023, With 430 New Lenders Active

This article looks at the big shifts in home equity originations in 2023. The first table summarizes the key changes from 2022 to 2023. The highlights:

• Total production was $179.10BN, down $41BN (18.5%) from $219.81BN in 2022
• The total number of home equity originations fell 10.5%, from $1.76MM to $1.56MM
• Banks and credit unions market share dropped $23.5BN (18.2%) and $16.6BN (22.9%) despite +400 new depositories originating loans
• Non-bank market share was down just $330MM (2%), with the total number of loans increasing by 59,000 (33.9%), from 174,377 to 233,484

Lenders with home equity originations in 2023

There are 3,794 unique financial institutions reporting home equity originations in 2023, comprising 1,933 (51.0%) banks, 1,306 (34.4%) credit unions , 515 non-banks (14.6%) and 40 (1.1%) savings & loans.

For HELOAN (2nd lien, closed-end mortgages) originations this included 3,658 institutions originating $33.6BN and 500,766 loans. For HELOC (1st and 2nd lien, open-ended lines-of-credit) originations this included 1,096 institutions originating $145.51BN and 1,070,351 loans.

Key trends in home equity originations in 2023

New Lenders

Of the 431 new lenders in 2023, 321 (74.5%) are banks, 23 (5.3%) are non-banks, 80 (18.6%) are credit unions and 7 (1.6%) are savings and loans. With the exception of 41 new credit unions and 3 non-banks originating HELOCs, all the new lenders where originating HELOANs.

HELOAN volumes and average loan amounts

Given the influx of new lenders, the number of HELOANs increased by 120,990 in 2023, with an average loan size of $88,756, lower by $2,706. This drove an additional $7.89BN in higher originations for the year. Over 50% of the loan volume growth came from non-bank lenders, with banks and credit unions each growing over 22% on the prior year.

HELOC volumes and average loan amounts

In contrast to the HELOAN performance, the number of HELOCs decreased by 305,895 with an average loan size of $127,690, some $15,506 (10.8%) lower than 2023. This resulted in $48.59BN less originations for the year. Banks originated 165,132 (22.4%) less loans and credit unions 132,273 (24.7%) less loans than the prior year. Non-banks were down 6.6%.

Top Home Equity Originations in 2023

To see the number of HELOANs and HELOCs originated by individual banks, credit unions and non-banks in 2023, we have developed the ‘Top Home Equity Originators in 2023’ product below.

Home equity originations in 2022 data