-

KBRA Releases Research – Trends in Home Improvement ABS

NEW YORK--(BUSINESS WIRE)--KBRA releases research analyzing new issue activity, loan characteristics, borrower attributes, and performance trends for the home improvement ABS segment of the unsecured consumer loan market.

Many homeowners in today’s market are experiencing what has been dubbed “hate my house, love my mortgage” syndrome, driven by rising housing prices and historically low mortgage interest rates more than doubling over the past 24 months. As a result, many homeowners are staying in place, but making improvements to their home to better suit their current needs.

However, the rapid rise in mortgage rates has made certain refinancing options, including cash-out refinancing, economically unattractive for many. Some homeowners are now accessing closed-end second lien mortgage loans (CES) and home equity lines of credit (HELOCs) as a more attractive source of home equity release. In addition, home improvement loans have grown in popularity in recent years, given the point-of-sale product offering, promotional interest rates, the absence of a requirement for a second lien on the borrower’s home, and faster credit decisions based on the borrower’s willingness and ability to repay. In addition to being an alternative to CES and HELOCs, home improvement loans provide borrowers with an alternative to other forms of consumer credit such as credit cards and unsecured consumer loans.

In 2024, we expect home improvement loan originations to increase and for ABS new issuance volumes backed by home improvement loans to remain in line with 2022-23 levels, as lenders continue to utilize diverse funding sources including whole loan sale programs, balance sheet, warehouse facilities and a combination of private and public securitizations. Given the prime quality of the underlying borrowers and utility to a borrower’s home, we also expect home improvement credit performance to remain in line with solar loan performance and to likely outperform most other consumer loan products.

Click here to view the report.

About KBRA

KBRA is a full-service credit rating agency registered in the U.S., the EU, and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.

Contacts

Contacts

Maxim Berger, Director, Consumer ABS
+1 646-731-1260
maxim.berger@kbra.com

Brian Ford, CFA, Head of Structured Finance Research
+1 646-731-2329
brian.ford@kbra.com

Perry Fried, Analyst, Consumer ABS
+1 646-731-1220
perry.fried@kbra.com

Kaci Emrich, Analyst
+1 646-731-1216
kaci.emrich@kbra.com

Business Development Contact

Arielle Smelkinson, Senior Director
+1 646-731-2369
arielle.smelkinson@kbra.com

Kroll Bond Rating Agency, LLC

Details
Headquarters: New York City, New York
CEO: Jim Nadler
Employees: 400+
Organization: PRI

Release Versions

Contacts

Contacts

Maxim Berger, Director, Consumer ABS
+1 646-731-1260
maxim.berger@kbra.com

Brian Ford, CFA, Head of Structured Finance Research
+1 646-731-2329
brian.ford@kbra.com

Perry Fried, Analyst, Consumer ABS
+1 646-731-1220
perry.fried@kbra.com

Kaci Emrich, Analyst
+1 646-731-1216
kaci.emrich@kbra.com

Business Development Contact

Arielle Smelkinson, Senior Director
+1 646-731-2369
arielle.smelkinson@kbra.com

More News From Kroll Bond Rating Agency, LLC

KBRA Assigns Rating to MSC Income Fund, Inc.'s $150 Million Senior Unsecured Notes Due 2029

NEW YORK--(BUSINESS WIRE)--KBRA assigns a rating of BBB- to MSC Income Fund, Inc.'s (NYSE: MSIF or “the company”) $150 million, 6.34% senior unsecured notes due 2029. The rating Outlook is Stable. The proceeds will be used for repayment of existing secured indebtedness. Key Credit Considerations The rating is supported by MSIF’s well diversified $1.3 billion investment portfolio spread among 150 portfolio companies (including equity investments) across 30+ industries as of 4Q25, with ~77% of it...

KBRA Assigns Preliminary Ratings to Sequoia Mortgage Trust 2026-MED1 (SEMT 2026-MED1)

NEW YORK--(BUSINESS WIRE)--KBRA assigns preliminary ratings to 23 classes of mortgage pass-through certificates from Sequoia Mortgage Trust 2026-MED1 (SEMT 2026-MED1). SEMT 2026-MED1 represents the first publicly-rated RMBS backed by loans originated pursuant to Physician or Doctor Loan underwriting programs. These loans, which KBRA generally refers to as Medical Professional Mortgages (MPM), typically originated through specialized prime mortgage programs designed for borrowers in the healthca...

KBRA Releases Research – Middle East Conflict: Credit Implications

NEW YORK--(BUSINESS WIRE)--KBRA releases research that explores the potential credit implications of the war in Iran, examining both the near-term implications and the potential ramifications of a prolonged conflict. The most immediate risks stem from the disruption to traffic through the Strait of Hormuz, alongside broader operational disruption and security risks in the region. Direct exposure across KBRA-rated transactions is limited, although a prolonged conflict could, over time, weaken ma...
Back to Newsroom