Home equity balances increase in August
A signal of economic improvement?
Balances on home equity installment loans increased month-over-month in August, which is a possible sign of positive economic change, Equifax said in a recent report.
According to the latest National Consumer Credit Trends Report from Equifax, balances on home equity loans and lines of credit increased 0.3 percent in August.
Home equity balances have seen a decrease of 49 percent from their peak in September 2007 ($278 billion) to August 2012 $143 billion, Equifax noted.
The rise seen in August 2012 marks the first month-over-month increase since November 2007.
New Mexico experienced the largest monthly increase in home equity balances at 2.3 percent, followed by California (2.3 percent), Nevada (2.1 percent), Colorado (2.0 percent) and Florida (1.9 percent).
New Mexico also experienced the largest monthly increase in the number of outstanding loans in August at 1.7 percent, folowed by Florida (1.6 percent), Nevada (1.5 percent), California (1.35) and Colorado (1.3 percent).
“The residential real estate market finally seems to be finding solid ground,” Amy Crews Cutts, Equifax Chief Economist, said in statement. “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.”
The rate of home equity loan write-offs by banks decreased 16 percent in August to a rate of 2.69 percent. This is the lowest write-off rate seen since February 2008.