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					                                          Bureau
                                           of the
                                          Census

Home Equity Lines of Credit —
A Look at the People Who Obtain Them
Starting in the mid-1980’s, home          Northeast, a region that contained                owners (a median of 46 years
mortgage interest payments                only 20 percent of the Nation’s                   old versus 43 years). Compared
became the only interest payments         single-family home owners. Con-                   with other mortgaged owners, those
the average homeowner was al-             versely, 24 percent of owners with                with HEL’s also —
lowed to claim as an itemized tax         HEL’s lived in the South, which
deduction. This made home equity          contained 35 percent of the Na-                   H Were more likely to be White
lines of credit (HEL’s) popular.          tion’s single-family home owners.                 (93 percent versus 89 percent)
HEL’s are credit lines extended by a                                                        and less apt to be Hispanic
financial institution to a homeowner      Nationally, most homeowners with                  (3 percent versus 6 percent).
based upon the equity in                  HEL’s (89 percent) lived in metro-
                                          politan areas, usually in suburbs (68             H Were more apt to co own the
a home.
                                          percent) rather than in central cities            property with a person of the
This Brief profiles the 3.4 million       (21 percent). All single-family                   opposite sex (79 percent compared
single-family home owners who             home owners were both less metro-                 with 71 percent).
had HEL’s in 1991 and compares            politan (79 percent) and less subur-
                                          ban (53 percent).                                 H Had a higher median household
them to the 26.5 million single-                                                            income ($57,211 versus $43,985).
family home owners who had
                                          Persons with HEL’s were older
other types of mortgages. (These                                                            H Were more likely to have owned
                                          and made more money.
data apply to the single-unit proper-                                                       another home before they pur
ty these owners both owned                Homeowners with HEL’s were                        chased their current home
and lived on.) In addition, the           slightly older than other mortgaged               (60 percent versus 55 percent).
646,000 owners whose HEL was
their only mortgage are compared            Why Homeowners Get a Home Equity Line of Credit
to the 2.7 million whose HEL was a          Percent of single-family home owners with a home equity line of credit (HEL),
junior mortgage (i.e. they also had         by why they took out the HEL: 1991
at least one other mortgage on their        (Reasons are mutually exclusive. The universe includes only those
property).                                  who reported a reason.)
                                                     Make additions,
HEL borrowers were                           improvements, or repairs                                                       54%
                                                      to the property
concentrated in the Northeast
and in the suburbs.                                  Consolidate debts                             21%

One-third (35 percent) of owners               Purchase a consumer
                                                                                      10%
with HEL’s resided in the                  product (car, furniture, etc.)
                                                Pay for educational or
                                                   medical expenses              6%

                                                   Make other types of
                                                                               4%
                                                          investments

                                             Invest in other real estate      3%
SB/95 15
Issued June 1995                                       Other purposes         3%
U.S. Department of Commerce
                                            Note: Percentages do not add to 100 due to rounding.
Economics and Statistics Administration
BUREAU OF THE CENSUS
BUREAU OF THE CENSUS                            STATISTICAL BRIEF                                                   June 1995

Owners with HEL’s not only lived       H Lived in much less expensive                More information:
in older homes, but had been           homes (median value of $94,072                The data in this Brief were col-
living in them longer.                 compared with $147,506).                      lected by the 1991 Residential
Homeowners with HEL’s lived in                                                       Finance Survey (RFS), a survey of
                                       H Had lower median household                  about 70,000 residential property
homes that were a median of
                                       income ($40,887 versus $61,777).              owners, conducted as a follow-up to
27 years old, while other mortgaged
owners resided in homes that were                                                    the Census of Population and Hous-
                                       H Were less likely to have owned a            ing. A printed report with RFS data,
a median of 24 years old. Addition-    home built after 1980 (7 percent
ally, those with HEL’s had been liv-                                                 Residential Finance,
                                       compared with 19 percent) and to              Series CH-4-1, is available. Micro-
ing in their home for a median of      have acquired the home after 1980
13 years, 5 years longer than other                                                  data files from the RFS are avail-
                                       (26 percent versus 49 percent).               able on both computer tape and
mortgaged owners.
                                                                                     CD-ROM. Contact Customer
                                       H Had lived in their homes longer             Services (301-457-4100) for order-
Debt was a smaller share of home       (a median of 21 years versus                  ing information.
value for owners with HEL’s.           12 years).
For owners with HEL’s, median                                                        Contacts:
total outstanding mortgage debt        Women were more likely to have                Home equity lines of credit —
on the property was slightly higher    a stand-alone HEL.                            Howard Savage
($48,145) than it was for other                                                      301-763-8552
                                       As mentioned earlier, most HEL
mortgaged owners ($43,495). But        borrowers (2.7 million of the 3.4             Statistical Briefs —
the median value of their homes        million) co-owned the property                Robert Bernstein
was considerably higher ($137,145      with a person of the opposite sex.            301-457-1221
compared with $88,885). As a           But the remaining 703,000 did not;
result, their total debt was a much    about 50 percent of these borrowers           This Brief is one of a series that presents
smaller percentage of their home’s     were women. Among the 499,000                 information of current policy interest. It
value (a median of 41 percent          owners who did not co-own the                 may include data from businesses,
compared with 55 percent). Since       property and whose HEL was a ju-              households, or other sources. All statis
homeowners with HEL’s had owned                                                      tics are subject to sampling variability, as
                                       nior mortgage, around half were               well as survey design flaws, respondent
their homes longer, they would         women. However, among the
have more equity built up to                                                         classification errors, and data processing
                                       204,000 owners who didn’t co-own              mistakes. The Census Bureau has taken
borrow against.                        the property and had stand-alone              steps to minimize errors, and analytical
                                       HEL’s, two-thirds were women.                 statements have been tested and meet
Homeowners with HEL’s were                                                           statistical standards. However, because
                                       This suggests that a significant pro-
more apt to have multiple mort-                                                      of methodological differences, use
                                       portion of homeowners with stand-
gages on the property (81 percent,                                                   caution when comparing these data
                                       alone HEL’s may have been widows
79 percent of which were an HEL
                                       or divorcees with an earlier first            with data from other sources.
plus a first mortgage) than other
                                       mortgage that had been paid off.
mortgaged owners (11 percent).
They also had bigger first mort-
gages ($52,074 versus $47,064).

Owners whose HEL’s were                     Most Outstanding Home Equity Lines of
stand-alone mortgages were                  Credit Were Originated After 1987
even older.
                                            Number (in thousands) of single-family homes with an outstanding HEL,
Homeowners whose HEL was the                by year of HEL origination: 1991
only mortgage on the property were                                                                                  824
a median of 54 years old, about a                                                                             684
decade older than those whose HEL
was a junior mortgage. They also —                                                                    522

                                                                                               367
H Were less likely to have owned
another home before they bought                                                        268
their current one (45 percent                                                  140
versus 63 percent).                         24                          71
                                                               35
                                                  6      0
H Were less likely to co own the         1980    1981   1982   1983   1984    1985    1986    1987    1988   1989    1990
property with a person of the
                                                                      Year of HEL’s origination
opposite sex (68 percent versus
82 percent).

				
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posted:11/3/2009
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