Americans Aren't Using Their Homes as Piggy Banks Anymore
- Lucrative source of bank revenue falls by half since crisis
- Blame pinned on rates, online loans, recession shell shock
Photographer: Jacob Kepler/Bloomberg
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A once-popular loan Americans use to finance home renovations and college tuition is slowly dying, slashing a lucrative source of revenue for the nation’s largest banks.
Home equity lines of credit, open-ended loans that homeowners tap for cash using their properties as collateral, exploded in the run-up to the housing crash a decade ago, doubling in volume from 2003 to 2006, according to the Federal Reserve Bank of New York. Rapidly climbing property prices led homeowners to use their homes as piggy banks, fueling consumer spending.