IRVINE, Calif. (10/14/14)--Home equity lines of credit (HELOC) originations have risen 20.6% year-over-year, and have climbed to their highest level nationwide since June 2009, according to data from Irvine, Calif.-based RealtyTrac (Housingwire.com Oct. 9).
HELOCs also comprised 15.4% of all loans through the first eight months of this year, the highest percentage since 2008, according to the data.
At credit unions, home equity loans have hovered near 6% of all loans over the last 12 months, according to August's credit union monthly estimates from the Credit Union National Association.
Nearly 100 million homeowners in the United States, or about 19% of all homeowners with a mortgage, have at least 50% equity in their homes, according to Daren Blomquist, RealtyTrac vice president.
Further, the percentage of homeowners with negative equity has fallen to 17% in the second quarter of this year from 29% in the second quarter of 2012.
"The rise in HELOCs also reflects a natural evolution for a lending industry looking for products they can offer homeowners who have already refinanced their first-position loan into a low fixed rate," Blomquist said (Housingwire.com). "A HELOC enables homeowners to leverage additional equity they may have gained since refinancing while still preserving the rock-bottom interest rate on their first-position loan."
The only major metro area among the nation's 50 largest to experience a decrease in HELOC originations was Rochester, N.Y., where home equity loans fell 1%.
Riverside-San Bernardino in Southern California, Las Vegas, Cincinnati, Sacramento, Calif., and Phoenix saw the biggest year-over-year increases.
Despite the recent surge, HELOC originations still fall well short of their high points before the financial crisis, according to the data.
For example, the 797,765 HELOC originations made in the 12 months ending in June of this year were 313% below the number of HELOCs issued in the year ending in June 2006 (3.3 million).