Home equity lines of credit (HELOCs) reached an all-time high in the second quarter of 2024 as a growing number of homeowners used the credit method to unlock wealth in their homes, according to data collected by Maxwell, a mortgage information and technology company.

Maxwell’s Q2 2024 Mortgage Lending Report found that HELOCs continue to drive volume for the residential real estate sector, accounting for nearly 4% of the home lending market during the quarter and jumping 31% quarter over quarter and 61% year over year.

Other industry insights in the report included a year-over-year decline in loan volumes by about 4% during the quarter as mortgage rates remained elevated, pricing many would-be homebuyers out of the market, at least for the time being.

The report, which is based on more than $360 billion in loan volume produced by more than 300 lenders on the Maxwell Intelligence platform, found that first-time homebuyers paid an average of 16% for downpayments in Q2, an increase of 8% quarter over quarter and 20% year over year. The average monthly income for homebuyers reached record-high levels at $8,000 per month. First-time homebuyers had a little more breathing room with an average income of $6,000 per month.

“Maxwell’s Q2 numbers reflect the major challenges lenders experienced over the past quarter,” said Maxwell CEO John Paasonen. “With the 10-year Treasury yield falling below 4% for the first time since February, a reprieve finally appears imminent. As we progress towards 2025 — and the possibility of rate cuts — now is the time for lenders to prepare their operations for a significant uptick.”

In its final analysis, the Maxwell report forecasts a housing market turnaround soon as indicated by the cooling job market and falling Treasury yields. They expect the resulting lower interest rates to trigger greater buying activity and a new wave of refinancing, as pent-up demand translates into more business for the home mortgage sector. Maxwell estimates that current loan volumes are nearly 30% below the three-year average, leaving plenty of room for a dramatic influx of business as rate cuts materialize.

They also expect HELOCs to remain a popular avenue for homeowners to access equity in their properties because many of them are “locked into the golden handcuffs of sub-3.5% mortgage rates,” and are unable to afford to sell and move to a home with a higher interest rate.