Beyond a shortage of available homes, the U.S. is grappling with an aging housing stock desperately in need of updates and repairs.
The U.S. isn’t just dealing with a housing inventory shortage. It’s living with an aging housing stock that badly needs updates and repairs.
New analysis from Harvard University’s Joint Center for Housing Studies finds that 1 in 4 homeowners lives in a home built before 1960, and millions of these homes have problems ranging from holes in the floor to failing heating and plumbing.
Many of those owners may feel stuck, with low inventory and mortgage rates well above COVID-19 pandemic-era lows. Record home equity gives them a way to pay for fixes through a home equity line of credit (HELOC).
But lender data shows that a shrinking share of home equity borrowers cite renovations as their main reason for borrowing, while more are using the money to manage debt.
America’s homes need reinvestment
According to the American Housing Survey, whose most recent data comes from 2023, the nation’s housing stock is the oldest it has ever been, with a median age of 44 years.
That age carries a financial cost. A 2025 report from the Federal Reserve Bank of Philadelphia estimated that nearly half of owner-occupied homes built before 1940 needed at least one repair in 2024, compared with 26% of homes built in 2000 or later. Older homes also tend to have higher repair costs, and unaddressed problems can snowball into emergencies that threaten a household’s finances.
Deferred maintenance hurts at sale time, too, when needed repairs can drag down the price and limit the wealth an owner builds.
A tough moment to pay for it
The need for reinvestment is arriving as many households’ budgets are stretched.
Credit card balances reached $1.26 trillion in the second quarter of 2026, just shy of the record, according to the New York Fed. The average rate on accounts that carry a balance was above 21% in the first quarter, according to Federal Reserve data. Meanwhile, the cost of simply owning a home keeps climbing: The average home insurance premium rose 12% in 2025 to $2,948, and it’s projected to hit $3,057 by the end of 2026, according to Insurify.
“When cash flow gets tight and discretionary income seemingly erodes due to inflation, budgeting for renovating and maintaining a home becomes a secondary objective,” says Steven Talia, a certified financial planner and financial adviser at Morgan Stanley.
“Unfortunately, inflation has continued to contribute to tightened budgets. The lack of personal capital being allocated to home renovations and maintenance, especially for single-income and lower-income households, is becoming more of a theme.”
A HELOC loan is a common way for homeowners to pay for contractors working on their property. (Realtor.com/Getty Images) Why a HELOC is the go-to
A HELOC, a line of credit secured by the equity in a home, has long been a common way to pay for repairs, offering relatively affordable financing and plenty of flexibility.
“Older homes tend to need repairs that arrive in stages, like a roof one year and HVAC or plumbing the next,” says Kyle Bass, production business manager at Refi.com. “For some homeowners, a HELOC could be a good fit because it’s a revolving line. A borrower can draw as costs come up and make payments only on what you’ve used.”
For homeowners locked in to low-rate mortgages, the appeal is bigger. Many are sitting on a first mortgage well below today’s market rate, and a cash-out refinance would replace it with a new loan at a higher one.
“With a HELOC, only the amount actually borrowed is priced at the current rate, and the rest of their debt stays where it is,” Bass says. Closing costs are also usually lower than on a cash-out refinance.
That’s helped fuel borrowing. HELOC balances stood at $459 billion in the second quarter, $142 billion above their low in early 2022, according to the New York Fed. And plenty of owners are using the money the way you’d expect.
“Demand is coming from people who likely would have moved a few years ago and are now investing in the home they already have with bigger renovations, ADUs, energy upgrades, and modifications,” Bass says.
But the mix is shifting
The Mortgage Bankers Association’s 2025 Home Equity Lending Study found that the reasons for borrowing have changed. About 39% of borrowers cited debt consolidation in 2024, up from 25% in 2022. Over the same period, the share citing home renovations fell from 65% to 46%.
Bass reads that as a sign of owners with lots of equity and low first-mortgage rates using a second lien “for more than renovations.” It isn’t necessarily a sign of distress.
Replacing 21% credit card debt with a lower-rate HELOC can be a smart move, and the data can’t say whether these borrowers would otherwise have put the money into repairs. But with older homes needing work and household budgets under pressure, the trend raises the possibility that some repairs are being pushed back.
How to use a HELOC wisely
For owners of older homes who do tap their equity, Bass says the priority should be repairs that protect value or head off bigger costs, such as roofing, foundation, HVAC, electrical, and water intrusion issues.
“Deferred maintenance can quietly erode a home’s value and insurability,” he says.
It’s also important to not let a good deal get you out over your skis, taking out more than is necessary.
“Where a homeowner gets into trouble is when the banks overextend the size of the line of credit to entice the borrower with a potentially lower interest rate. When that line of credit is open and the borrower is not disciplined in managing debt and finances, that's cause for concern,” Talia says.
Finally, be sure to borrow for a project that promises a return on your investment, not to fund a lifestyle change.
“Equity is best spent on things that maintain or add to the asset,” Bass says.