Borrowers appear to be turning to home equity loans again, with the number of new home equity revolving lines of credit (HELOCs) up 10 percent over the past year.

New figures released today by the credit rating firm Equifax show there were 71,600 new HELOCs established in the first month of this year, up from approximately 65,000 in January 2013. Overall, the volume of new revolving credit was up 18.4 percent over the same period, to $7.3 billion in new credit from $6.2 billion extended one year earlier.

"Spring is here and consumers' desire for credit appears to be rising alongside the mercury," said Amy Crews Cutts, Chief Economist at Equifax. She noted that increases not only in HELOCs, but in auto loans and credit cards show consumers are not only looking to borrow more, but that banks are increasingly willing to lend it to them.

Boosted by rising home values

The increase in home equity lending was driven in part by rising home values, which gave homeowners more equity to draw upon and provided larger lending cushions for banks. According to the widely used Chase-Shiller/Standard&Poor's indices, U.S. home prices increased more than 13 percent over the 12 months ending in January 2014.

Also consumers take taking out more home equity lines of credit, those with existing HELOCs have been paying down their balances overall. Despite the additional loans, the cumulative balance on all HELOCs was down 6.5 percent in March, compared to one year before, according to Equifax.

Delinquencies aging out

The total volume of severely delinquent HELOCs fell to a five-year low in March, totaling slightly more than $8 billion. Just over two-thirds of the total of severely delinquent HELOCs were from lines of credit originated from 2005-07, as the housing bubble was weakening.

Among other types of credit, auto lending was up 20 percent over the past year, with a total of $34.3 billion in January, compared to $28.6 billion one year before. Bank-issued credit cards were up by nearly 30 percent, with $19.5 billion in new credit issued that month, compared to $15.2 billion in January 2013.

Published on April 28, 2014