HELOC rates hit lowest level in three years

What happened: Home Equity Line of Credit (HELOC) and home equity loan rates have reached their lowest level in three years. According to real estate analytics firm Curinos, the average HELOC rate is now 7.25%, a 61-basis-point spread from the current home equity loan rate of 7.86%. Both HELOC and home equity loan rates have been declining since May 15, 2026, with the latest rates tying the 2026-low on May 10.

Market impact: This decline in HELOC and home equity loan rates benefits consumers looking to tap into their home equity. It opens up opportunities for homeowners to access cash for various purposes, such as home improvements, debt consolidation, or other expenses. However, it's crucial to note that these rates are still higher than purchase and refinance rates. The housing market may see increased activity, with more homeowners choosing to borrow against their home equity instead of selling or refinancing their mortgages.

What to watch next: Investors should keep an eye on the prime rate, as HELOC and home equity loan rates are tied to it. The next Federal Reserve meeting, scheduled for July 26-27, 2026, could provide insights into future interest rate movements. Additionally, the upcoming housing market reports, such as the S&P CoreLogic Case-Shiller Home Price Indices (scheduled for late July), will offer clues about the direction of home values and, consequently, home equity levels.