Home equity lines surged 39% at FDIC-insured institutions during 2002, growing to $256.4 billion on bank balance sheets at year-end. That figure is more than double the $121.3 billion in home equity lines outstanding at year-end 1999. The $256.4-billion is almost exactly half (49.5%) of the $518.5 billion of aggregate home equity commitments. It also marks the first time home equity lines of credit have constituted more than 5% of the loans and leases held by FDIC-insured institutions. Low interest rates and increasing home values are being credited for driving the trend.
"Every consumer ought to have a home equity line," said Steve Trager, chairman/CEO of Republic Bancorp., Inc., Louisville. "If you need it, it's easy to access and relatively inexpensive. If you don't need it, you don't have to use it."