How senior citizens are changing the dynamics of the housing market

Market Trends & Dynamics - The housing market is experiencing a slowdown, with home sales at the slowest summer pace in a decade [1] - This slowdown is attributed to higher buying costs and economic uncertainty, prompting homeowners, especially seniors, to stay put [1] - Existing home sales are projected to be the worst in over 25 years due to high prices, high rates, and seniors not moving [10] - A significant portion (60%) of US homes are owned by seniors, contributing to the "stuck" real estate market [9] Home Equity Lines of Credit (HELOC) - Home equity lines of credit (HELOC) have reversed a 17-year shrinking trend and are now the fastest-growing consumer loan category [3][4] - The HELOC market has grown from approximately $200 billion to $250 billion after bottoming out [4] - Private credit firms are actively pursuing HELOCs, with over $42 billion in reported forward purchase agreements for home equity and personal loans, potentially double that amount unreported [5][6] - 41% of all home equity debt is held by seniors, up from 17% in 2000 [11][12] Company Performance & Opportunities - Rocket Companies' home equity business is up over 70% from last year [6] - Mr Cooper's home equity activity is more than double last year [6] - SoFi is experiencing strong growth in its home equity and personal loan businesses, with over $12 billion in forward purchase agreements [7][8] - Home Depot reported strong earnings, indicating homeowners are undertaking renovations by tapping into their home equity [17] Risk Assessment & Consumer Behavior - Home equity loans are currently a relatively cheap form of debt, second only to mortgages [14] - Loan-to-value ratios are significantly lower than during the last housing crisis, averaging just over 20% compared to over 50% [15] - Seniors are tapping into home equity to offset rising homeownership costs, such as property insurance (up over 70% in the last 5 years) and property taxes [12][13] - Increased HELOC usage may be impacting credit card growth, with subprime credit card issuers potentially facing revenue challenges [20][21]