TD Bank Survey Finds that U.S. Homeowners are Staying Put Amid Low Housing Supply and Leveraging Home Equity to Build Wealth, Consolidate Debt and Finance Major Renovations

In This Article:

Younger generations are more likely to use home equity loans to plan for long-term financial health

CHERRY HILL, N.J., November 14, 2024--(BUSINESS WIRE)--A recent survey from TD Bank, America's Most Convenient Bank?, reveals that in the current market environment, homeowners continue to see their properties as powerful financial assets, with two-thirds (66%) viewing their home as a source of generational wealth.

TD Bank’s HELOC Trend Watch is a national survey of more than 1,800 homeowners who purchased a home in the past 10 years using a mortgage loan and currently own their home. The survey explores trends in how homeowners are building their equity.

"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."

Homeowners Stay Put Amid Housing Shortage

Three out of five respondents who purchased their most recent home (60%) reported that the low interest rates they secured on their mortgage have influenced their decision not to sell in the near future. Instead, they are building wealth through their home's growing equity.

This decision is also influenced by the ongoing housing shortage – which has encouraged many existing homeowners to stay put and tap into their home’s equity. In fact, the percentage of homeowners who are not planning to sell in the near future and are waiting for housing inventory to increase before making a move has doubled year-over-year from 9% in 2023 to 18% for this year. As a result, many homeowners are opting to invest in their current properties, rather than face the challenges of buying in a competitive market. This approach aligns closely with the goals of younger homeowners, as 74% of Gen Zers and 71% of Millennials view their homes as sources of generational wealth, leveraging their equity to secure their financial futures.

Homeowners are Seeking Additional Debt Consolidation Options

Eighty-four percent of respondents are currently holding debt beyond their mortgage, with 62% of those carrying $10,000 or more in additional debt – increasing slightly from 61% in 2023. Rising debt levels are putting increased pressure on household finances, as nearly three-quarters of respondents who currently have any debt other than their mortgage (71%) said they would be interested in consolidating their debt under one loan at a lower interest rate.