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Adobe Stock Image Yellow house sitting on dollar bills

It is common for homeowners to tap their home equity to pay for renovation projects. Millennial homeowners, however, are more likely to use home equity lines of credit (HELOC) for purposes other than home improvement, according to a study from Citizens Bank.

The study found that millennials preferred other options to HELOCs for their home improvement projects compared with older homeowners. Six in ten millennials were more likely to use options other than HELOCs to finance home improvement projects compared to less than half of older homeowners, Forbes reports.

While traditionally the majority of HELOCS are used for home improvement projects (70%), Millennials are significantly more likely than homeowners over 40 to use a HELOC for non-traditional uses, including financing a new business venture, 45% versus 19%; big-ticket purchases, 44% versus 35%; taking time off work to support or care for family, 44% versus 24%; and taking a vacation, 36% versus 17%.

According to Citizens’ survey, those with a HELOC report that the top drivers for optimism are seeing the value of homes increasing in recent years, 65%; affordability, 50%; a strong economy, 43%; and the current national housing market, 31%.

Brendan Coughlin, president of consumer deposits and lending at Citizens Bank, said many millennials tend to be first-time buyers, so typical HELOC borrowing needs might not be relevant for the cohort. The cohort is less likely to have children and likely recently purchased their home, so they are less likely to start home renovation projects than older homeowners, Coughlin said.

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