“This recent rise in (home equity lines of credit) indicates that an increasing number of homeowners are gaining confidence in the strength of the housing recovery and, more importantly, have regained much of their home equity lost during the housing crisis,” said Daren Blomquist, Realty Trac vice president.
As home prices rose a decade ago, millions of Americans hit the home equity line to the tune of many tens of billions of dollars each year. The money, used to pay bills and make purchases, was important fuel for overall economic growth.
The practice slowed down when housing prices crested, and it stopped when prices collapsed – and that badly sapped consumer spending.
The housing bubble peaked nationally in 2006, and a year later in metro Atlanta. Prices in many places have not risen anywhere near their peak levels.
So homeowners who are still underwater – that is, who owe more on their mortgage than their homes are worth – are unable to refinance or draw on equity. But home equity lines are picking up because 19 percent of American homeowners – nearly 10 million nationally – now have regained at least 50 percent equity in their homes, according to RealtyTrac data.