U.S. Homeowners Are Accumulating & Holding Onto Wealth
New York, NY, July 10, 2018-U.S. homeowners are accumulating wealth but are less likely to cash in on their newfound wealth than during previous housing booms, reports CNBC.
“As home values rise, home equity lines of credit, often used to tap home equity, are flatlining, and the overall amount of money people are taking out of their homes is shrinking.
“The collective amount of so-called tappable equity, which is the appraised value of a home minus the 20% most lenders require borrowers to keep as a safety net, grew by 7% in the first quarter of this year compared with the previous quarter, according to Black Knight, a mortgage software and analytics company. That is the largest single-quarter growth since the company began tracking it in 2005. It is up 16.5% compared with a year ago.
“Homeowners now have a collective $5.8 trillion in tappable equity, the highest volume ever recorded and 16% above the last home price peak in 2006. The average homeowner with a mortgage gained $14,700 in tappable equity over the past year and has $113,900 available to draw. This is the amount over and above 20% of the value of the average home.”