The rising value of homes has not only brought many an underwater homeowner back into the black, it appears to be causing some to tap into equity for a variety of purposes.
The beneficiaries are, of course, the lenders but also building supply companies such as Lowe’s and Home Depot.
Borrowing Is Back
According to a story on CNBC, borrowers are seizing the opportunity to engage in those projects that they have put off for a number of years.
Home equity lines of credit [HELOCs] volume is now up 21% in the past two years. And as of 2017, HELOCs are at their highest level since 2008, according to Moody’s. The trend appears strong enough to continue to sustain itself as value and the economy appear to be on the mend.
In addition to the trending HELOCs, borrowers are also putting smaller down payments on home loans.
Before the last housing boom, the median down payment was over 7%, dropping to 3% in 2006-7.
At the end of 2016, the median down payment had fallen to 6%, according to ATTOM Data Solutions.
This only thing that will stop such an explosive growth in HELOCs is the rise of interest rates.
What is somewhat different today is that inventory still remains low, demand is high, and mortgage rates are still reasonable, in line with higher home values.
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.com, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.