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18 The best defense for a better neighborhood Real People, Real Results www.assero24.com/defense HELOCS TO SPIKE 30 PERCENT IN 2017- 2018 TransUnion released its HELOC study in October, which explores why consumers open HELOCs and estimates the percentage of HELOCs opened under specific motivations. e company projects 1.4 million new HELOC borrowers in 2017 and 1.6 million in 2018, a 30 percent increase from the previous two-year period of 2015-2016, which was 1.1 million and 1.2 million projected new borrowers, respectively. ey also project 10 million consumers to originate a HELOC between 2018 and 2022, which would be more than double the 4.8 million HELOCs originated in the previous five-year period of 2012-2016. e study is designed to help analysts understand why people want to pursue this specific form of credit and evaluate the recent dynamics of the HELOC industry. TransUnion studied 60 million consumers who were eligible for a HELOC; the observation period for consumer credit traits took place between June 2015 and May 2016. Consumers were identified as HELOC-eligible in May 2016 and the observation period for opening a new HELOC occurred between June 2016 and January 2017. "With aggregate home equity surpassing that of the housing boom in the mid 2000s, TransUnion is projecting between nine and 11 million consumers will originate HELOCs over the next five years," said Joe Mellman, Senior Vice President and Mortgage Line of Business Leader at TransUnion. Mellman believes the 10 million approximated to originate HELOCs will do so primarily due to continued home equity growth and a relatively robust economy. ere were 4.9 million HELOCs originations in 2005; back then, home equity amounted to $13.3 trillion. In 2011, originations dropped to 600,000 and home equity declined to $6.3 trillion. Home equity didn't rise back to $13.3 trillion until 2016, but HELOC originations stayed at 1.2 million, according to TransUnion. e study finds that rising home prices and, as a result, increasing equity, is sparking interest in HELOCs. "While HELOC originations often track with home equity, which is correlated to rising home prices, we found that the rebound in HELOCs diverged from the recovery in home values following this past recession," Mellman said. To lenders, borrowers opening HELOCs may be of particular interest because they show more positive credit characteristics compared to nonborrowers. According to the study, consumers who open a HELOC tend to be more credit active, carry higher levels of credit card and nonrevolving debt, and demonstrate more credit responsible behavior via lower delinquency.