New York, NY, Nov. 25, 2013 --Spending on home renovations is rising significantly thanks to the resurgence of home equity lines of credit, Bloomberg News reports.
So-called "helocs" are back because property values have been rising rapidly in many areas, interest rates are low, and the employment picture has improved.
Heloc originations could rise 16% this year and reach another five-year high in 2014, Bloomberg said, quoting Mustafa Akcay, an economist for Moody’s Analytics.
The result, in part, is that homeowners are splurging on higher priced renovations. The story reports the growing interest in $1,000 faucets.
The median price for an existing home probably will gain 11% this year, according to the Mortgage Bankers Association.
Heloc originations will increase to $91 billion in 2013 and increase to $97 billion next year, Bloomberg said, citing Akcay.
Nevertheless, that's roughly a third of the amount in 2007.