Homeowners are tapping into their equity at the fastest rate in eight years. Millennials are the ones leading the pack of those who are cashing in.


In 2016, the number of homeowners with potentially “tappable” equity rose to 39.5 million—those are borrowers who have at least 20 percent equity in their homes,according to Black Knight Financial Services.


Millennials, in particular, are turning to HELOCs (Home Equity Line of Credit) more so than Generation X members or baby boomers, according to a recent survey by TD Bank. More than a third of millennials say they’re considering applying for a HELOC in the next 18 months. That is more than double the rate than Generation X and nine times higher than baby boomers. HELOCs are a great shorter term mortgageoption for borrowers. If the plan is to upgrade and sell your home within 3-8years a HELOC might be a better option than a 30-year cash out refinance.


Indeed,remodeling was the number one motivation for taking out a HELOC last year,according to the TD Bank survey (debt consolidation was number two). Millennials are entering the housing market slower than previous generations.When they do buy, they often are purchasing lower-cost, fixer-upper homes. For first time home buyers in Hawaii this has become a common as move-in ready listings are very competitive and listings needing updating may offer a good opportunity for 1st time buyers.“We are a little surprised about that,” Mike Kinane, general manager of home equity products at TD Bank, told CNBC. “I think millennials are taking a more conservative approach, but they recognize that HELOCs have a good purpose, especially for remodeling.”


Read More: Tips for buying a property with 5% Down Payment


As home prices rise, millennials are pulling out equity from their home to remodel. They say their main motivation to renovate is to increase the value of their home, according to the TD Bank survey.


Source: “Homeowners Are Pulling Cash Out Again; This Time It’s the Millennials,” CNBC (April 3, 2017)


Hawaii Starts Here | Joseph Castaneda (RA)


Joe is realtor-associate with Better Homes and Gardens Real Estate Advantage Realty. He majored in finance and has experience as a former mortgage loan originator for a local bank. He uses his finance, mortgage, and real estate knowledge to help home buyers find the right properties to fit their needs. Contact Joe by phone or email at (808) 351-8394 or JoeC@BetterHawaii.com