A recent study completed by Black Knight Financial Services confirms that available home equity in the United States has jumped by an estimated $1 trillion during the last year. This is the highest it’s been since 2007, which is happy news for homeowners.
Looking at the Specifics
The assessment found that the majority of this year’s growth occurred from January through May. During these five months, the nation’s available equity expanded by a whopping $825 billion. This calculation came to about 2.5 times more than it was at the end of 2011. According to the numbers, the nation’s average homeowner with a mortgage has access to about $19,000 more equity than he or she did last year.
Available Equity
In completing the study, financial researchers determined that 37 million potential borrowers have access to equity in their existing homes. When the research team dug deeper into the numbers, they found that 39 percent of the nation’s available equity was in California alone. This is six times as much as the state with the next highest numbers, which is Florida. Despite the concentration of equity in California, many homeowners are seeing the value of their homes rise.
Considering Credit Scores
After the mortgage crisis, fewer people had access to home equity credit lines, but today, this type of borrowing is making a comeback. However, lenders are looking for borrowers with exceptional credit quality. As a result, the risk presented by home equity credit lines has ebbed. This new report could signal a change in the housing market, so keep it in mind if you’re on the fence about a home purchase.