About Home Equity Loan
Home Equity Loan is basically a second mortgage against an individual’s residential property. This allows individual homeowners to borrow capital against the equity of residential property which can be called collateral in this case. The amount of loan to be sanctioned under this scheme is derived from the equity value of the home as set by banks or credit unions. This type of loan, specifically, HELOCs was quite popular from 2004 to 2007 till the mortgage financial crisis. Following this, recently the home equity loan market started gaining popularity, with consumers being more conservative this time around and preferring the fixed-rate loans segment. Such Home Equity Loans are widely used for home restoration, educational expenses like tuition fees or medical expenses, and other personal financial requirements. Geographically, North America is the most dominant market the Home Equity Loans, which is expected to remain so.
Attributes | Details |
---|
Study Period | 2018-2030 |
Base Year | 2023 |
Unit | Value (USD Million) |
CAGR | 3.5% |
The companies are exploring the market by adopting expansions, investments, new service launches, and collaborations as their preferred strategies. The players are exploring new geographies through expansions and acquisitions across the globe to gain a competitive advantage through combined collaborations. Analyst at AMA Research estimates that United States Players will contribute the maximum growth to Global Home Equity Loan market throughout the forecasted period. Established and emerging Players should take a closer view at their existing organizations and reinvent traditional business and operating models to adapt to the future.
Bank of America Corporation (United States), Citibank (United States), Truist Financial Corp. (United States), Reali Loans (United States), U.S. Bank (United States), Flagstar Bank (United States), Guaranteed Rate IL (United States), PNC Bank (United States), Discover Financial Services (United States) and Pentagon Federal Credit Union (United States) are some of the key players that are part of study coverage. Additionally, the Players which are also part of the research coverage are TBK BANK (United States), Connexus Credit Union (United States) and LoanDepot LLC (United States).
Segmentation Overview
AMA Research has segmented the market of Global Home Equity Loan market by Type (Fixed-Rate Loan and Home Equity Lines of Credit (HELOCs)), Application (Medical Expenses, Educational Expenses, Home Restoration, Debt Consolidation and Others) and Region.
On the basis of geography, the market of Home Equity Loan has been segmented into South America (Brazil, Argentina, Rest of South America), Asia Pacific (China, Japan, India, South Korea, Taiwan, Australia, Rest of Asia-Pacific), Europe (Germany, France, Italy, United Kingdom, Netherlands, Rest of Europe), MEA (Middle East, Africa), North America (United States, Canada, Mexico). If we see Market by Sales Channels, the sub-segment i.e. Banks will boost the Home Equity Loan market. Additionally, the rising demand from SMEs and various industry verticals gives enough cushion to market growth. If we see Market by Loan Slab , the sub-segment i.e. Self-Occupied Residential Property will boost the Home Equity Loan market. Additionally, the rising demand from SMEs and various industry verticals gives enough cushion to market growth.
Influencing Trend:
Local Credit Unions are Highly Preferred during Home Equity Loans due to Lower Interest Rates than Banks and Fixed-Rate Loans are widely preferred since the 2007 Mortgage Crisis
Market Growth Drivers:
Home Price Appreciation, Large Scale Penetration of Home Loan Market and Consumer Lifestyle and Behavioural Changes
Challenges:
Lower Margins for the Lenders, Irregularities in Interest Rates with Home Equity Loans compared to Mortgage and Home Loans and Volatility in Equity
Restraints:
Dynamic Changes in Regulations Surrounding Home Equity Loans
Opportunities:
Asia Pacific Market has been Less Explored in Terms of Home Equity Loan Market Expansion and Launching Innovative Products in order to Get Competitive Edge over a Large Number of Small and Big Competitors
Market Leaders and their expansionary development strategies
In August 2023, Spring EQ, a leading provider of home equity financing solutions, announced today that it has entered into a definitive agreement to be acquired by an affiliate of Cerberus Capital Management, L.P. , a global leader in alternative investing.
In May 2023, Hometap has launched a digital platform designed to help homeowners make more informed financial decisions about their home. The new Home Equity Dashboard allows homeowners to view their equity and access tools and resources that will help them reach their financial goals
US Congress has sanctioned the Home Equity Loans Consumer Protection Act (HELCPA) which regulates the Disclosure and Advertising of Home Equity Loans
Key Target Audience
Home Equity Loan Providers, New Entrants/Investors, Venture Capitalists and Private Equity Firms, Analysts and Strategic Business Planners, Government Regulatory and Research Organizations, End-Use Industries and Others
About Approach
To evaluate and validate the market size various sources including primary and secondary analysis is utilized. AMA Research follows regulatory standards such as NAICS/SIC/ICB/TRCB, to have a better understanding of the market. The market study is conducted on basis of more than 200 companies dealing in the market regional as well as global areas with the purpose to understand the companies positioning regarding the market value, volume, and their market share for regional as well as global.
Further to bring relevance specific to any niche market we set and apply a number of criteria like Geographic Footprints, Regional Segments of Revenue, Operational Centres, etc. The next step is to finalize a team (In-House + Data Agencies) who then starts collecting C & D level executives and profiles, Industry experts, Opinion leaders, etc., and work towards appointment generation.
The primary research is performed by taking the interviews of executives of various companies dealing in the market as well as using the survey reports, research institute, and latest research reports. Meanwhile, the analyst team keeps preparing a set of questionnaires, and after getting the appointee list; the target audience is then tapped and segregated with various mediums and channels that are feasible for making connections that including email communication, telephonic, skype, LinkedIn Group & InMail, Community Forums, Community Forums, open Survey, SurveyMonkey, etc.