Metro Atlanta homeowners are again starting to hit the home ATM – but nothing like the heyday of the housing bubble.
The number of home equity lines of credit being “originated” – or opened – in Atlanta jumped 38.7 percent during the past year to a total of 10,674, according to a study released Thursday by RealtyTrac, a real estate data company.
That is still down a whopping 268 percent from Atlanta’s peak in home equity loans, which was reached as the recession was setting in and home prices were starting to plummet.
Atlanta ranked 13th nationally in the rate at which home equity lines are growing. It ranked 16th in the quantity of equity lines being opened.
And Atlanta still was adding home equity lines faster than the nation as a whole: the national average for the opening of home equity lines was up 20.6 percent.
“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.
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