Millennial homeowners are more likely to be current and future users of home equity lines of credit than either Gen-Xers or baby boomers.
Over the next 18 months, 35% of the millennials responding said they would consider applying for a HELOC versus 15% of Gen-Xers and 4% of baby boomers, a survey of over 1,350 U.S. homeowners conducted for TD Bank found.
Nearly four in 10 millennials are current HELOC users, compared with 31% for both the Gen-X and baby boomer generations. Most millennials, 64%, had cited renovations as their primary purpose for the proceeds.
However, 29% of all respondents admitted they were only somewhat informed about or not confident in their knowledge of using a HELOC.
"It's encouraging to see so many people — especially the younger generation — taking advantage of the increase in their home equity through a HELOC, but at the same time, it's surprising that many HELOC users lack confidence in their knowledge about how to use them," said Mike Kinane, TD Bank's general manager, home equity products, in a press release.
Half of those surveyed would go to a branch to apply for a HELOC, while approximately one-quarter would prefer to apply online.
While the data was compiled by a for-profit bank, it still bodes well for credit unions, which as an industry have seen a significant influx of younger members in recent years along with strong mortgage volumes. The latest Credit Union Trends Report from CUNA Mutual Group finds HELOC volumes rising at CUs, with credit unions originating $27 billion in HELOCs and other second mortgages in 2015 and $28.6 billion in 2016.
