Home equity payments up – first time since 2007

By
Real Estate Agent with Downing-Frye Realty, Inc. Naples, FL

Reproduced with permission...

The information herein seems subtle at first glance. There are two things happening: 1) homeowners are taking out new home equity lines of credit, and 2) homeowners are using more of their existing credit lines. Underlying this, there is more equity available to tap into.
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Home equity payments up – first time since 2007

ATLANTA – Oct. 1, 2012 – Signaling a possible turning point in mortgage demand, home equity installment balances rose 0.3 percent in August – the first monthly increase since November 2007 – according to Equifax’s National Consumer Credit Trends Report.

The total number of home equity installment loans fell 43 percent over the past four years – from 7.7 million in August 2007 to 4.4 million in August 2012. The nation’s total home equity balances fell with it, declining 49 percent from a $278 billion peak in September 2007 to $143 billion in August 2012.

The August increase, however, indicates a positive change in direction.

“The residential real estate market finally seems to be finding solid ground,” says Equifax Chief Economist Amy Crews Cutts. “We’re seeing signs that the contraction in mortgage debt is slowing, and delinquencies continue to trend down at the same time that mortgage rates set new record lows on almost a weekly basis. The environment has been set for growth for a while – now it looks like it may finally be happening.”

New Mexico led the nation in the growth of home equity installment loans with both the largest gain in dollar balances (2.3 percent) and number of loans (1.7 percent) outstanding.

Florida ranked No. 4 in its dollar value of home equity installment loans, rising 1.9 percent. California (2.3 percent) came in second, followed by Nevada (2.1) and Colorado (2.0 percent).

Florida (1.6 percent) came in second for the number of new loans by percentage, however. Nevada (1.5 percent), California (1.35) and Colorado (1.3 percent) rounded out the top five.

Delinquency rates have been stable in a narrow band in recent months on home equity accounts, Equifax’s report says, though loan write-offs grew in August as well.

Headquartered in Atlanta, Equifax operates or has investments in 18 countries and is a member of Standard & Poor’s (S&P) 500 Index.

© 2012 Florida Realtors®
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Topic:
Lending / Financial
Tags:
home equity
home equity line of credit

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Additional Information

Bob Pisa Downing-Frye Realty

Outstanding Performance Award: 2011
Top Performance Award 2012
Gulfshore Life Magazine Five-Star Award: 2010, 2011, 2012, 2013

Author Bio: Bob Pisa moved to the Naples area after spending 30 years in the Boston area. He was raised in the metro-NYC area and graduated from the Rochester Institute of Technology (Rochester, NY) in 1974. His career has been primarily in high-technology manufacturing and enterprise software for multi-national companies. Bob was also a successful small business entrepreneur and ultimately sold his start up business after six years of operation to a major corporation. He is the former Vice President for the Grandezza Master Homeowner's Association (two terms) and former President of the Santa Lucia Homeowner's Association (three terms.) Bob attained his real estate license in 2005, and is working in commercial and residential real estate. He is a member of Naples Area Board of Realtors®, NAR, and Florida REALTORS.