With interest rates remaining heightened, homeowners are increasingly staying put and using their properties as financial assets, according to a recent survey from TD Bank.
Per the bank’s HELOC Trend Watch survey (which gathered responses from over 1,800 homeowners who purchased a home in the past decade), 60% of respondents who secured low-interest mortgages are opting to stay in their homes rather than sell. This decision is largely driven by the desire to build wealth through rising home equity, combined with the ongoing housing shortage.
In fact, the share of homeowners delaying sales in anticipation of more housing inventory has doubled from 9% in 2023 to 18% this year. Many are choosing to invest in their current homes rather than face a competitive housing market, a trend that’s particularly strong among younger homeowners — 74% of Gen Zers and 71% of millennials see their homes as key to securing generational wealth.
“Homeownership is not just about having a place to live — it’s a critical component of financial security and building generational wealth,” said Steve Kaminski, head of U.S. residential lending at TD Bank. “With interest rates expected to continue to drop over the next year, home prices and equity values will fluctuate alongside the U.S. housing supply. We’re finding that home equity is playing a bigger role in helping homeowners stay financially flexible.”
It’s worth noting that many who are resolving to stay put are looking to upgrade their homes to improve their equity. Forty-three percent of those who are currently renovating or planning to renovate their home are doing so to raise the equity of their home, per TD Bank’s survey. More than half (54%) of respondents who took out a HELOC or a home equity loan used it or plan to use it for renovations; common current or future projects include cosmetic improvements, outdoor upgrades and eco-friendly additions.
“By leveraging equity, homeowners are making essential upgrades and investing in the longevity and value of their property,” said Jon Giles, head of residential lending strategy & support at TD Bank.
Financial obligations beyond the mortgage are also a growing concern, with 84% of homeowners carrying additional debt; indeed, 62% of them owe at least $10,000. Rising debt levels are straining finances, prompting 71% of those with non-mortgage debt to express interest in consolidating their loans at lower rates.
The Federal Reserve appears set to roll out more rate cuts in the coming months, though 39% of homeowners remain hesitant to apply for a home equity line of credit (HELOC) or home equity loan, describing the current borrowing environment as “challenging.” Thirty-seven percent, however, indicated that the recent rate reductions have made them more likely to apply for a HELOC or a home equity loan, describing them as a cost-effective way to reduce debt.
Notably, younger generations are more likely to pursue HELOCs or equity loans in the next 18 months, outpacing older generations. Some 73% of Gen Zers and 66% of millennials who previously tapped into their home equity or know about HELOC and equity loans said they are likely to apply for one in the next year and a half. Gen Xers (53%) and, particularly, baby boomers (27%) are far less likely to tap into their built-up equity.
