Homeowners are sitting on $5.4 trillion in equity according to a new report, the highest amount ever recorded. As a result, homeowners have greater access to ready cash in the form of a home equity line of credit (HELOC).
In comparison the report notes that current equity levels are 10 percent higher than the pre-recession peak in 2005. Black Night Financial Services reported this week that the amount of tappable equity by homeowners climbed $735 billion in 2017 alone and borrowers are primed to utilize it.
"The market is poised for a strong shift toward HELOCs," says Ben Graboske, executive vice president of Black Knight Data & Analytics. "Over half of all tappable equity is held by borrowers with credit scores of 760 or higher, which creates a large pocket of low-risk HELOC candidates."
Equity levels increases were seen most dramatically seen in California last year. Currently, 39 percent of all the nation's home equity currently lies with homeowners in the state.
Meanwhile, conforming no-point 30-year fixed mortgage rates averaging 4.375 percent, 15-year rates near 3.875 percent and the 5-year ARM averaging 4 percent.
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