Equifax: Home Equity Revolving Credit Reaches Three-Year High

Equifax: Home Equity Revolving Credit Reaches Three-Year High New home equity revolving lines of credit have reached a three-year high, totaling more than $44 billion year-to-date through July, according to the October edition of Equifax's National Consumer Credit Trends Report.

Equifax reports that revolving home equity credit experienced a 9% increase from the recession low for the same period set in 2010 of $40.6 billion. In addition, write-off rates among home equity revolving lines fell 1.3% in September to 2.15%, the lowest level since April 2009.Â

The number of new revolving home equity lines of credit year-to-date through July stood at 495,000, though more than 76% lower than the seven-year high of more than 2 million through July 2006. Home equity revolving lines of credit fell 20% to $537 billion in September after peaking at $680 billion in May 2009.

Since November 2007, the total number of home equity revolving accounts has declined more than 34%, from 14.7 million to 11 million in September 2012.

‘Increasing new home equity revolving credit indicates homeowner confidence and momentum towards an improved market,’ says Craig Crabtree, senior vice president and general manager at Equifax Mortgage Services. ‘While the levels are significantly lower when compared to pre-recession peaks, the recent stability has given way to consistent growth. Total first mortgages are still contracting; however, the decreasing debt and delinquencies are positive signs of a stable foundation towards recovery.’

Separately, Equifax reports that total balances of severely delinquent mortgages through September ($419 billion) have decreased 41% from their March 2010 peak ($714 billion). More than 76% of severely delinquent balances among home equity revolving credit balances are sourced from originations between 2005-2007. Also, first mortgage balances of $7.85 trillion in September decreased 3.4% from the same month a year ago.


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