TransUnion eyes potential home equity boom. Will this boom mean you?

TransUnion Eyes Potential Home Equity Boom

Remember the HELOC boom of the 2000’s? It was going gangbusters right up until the global financial system nearly collapsed, led by a huge housing bust. Well, we may be back to the boom days soon, according to credit bureau, TransUnion.

HELOC’s, (or home equity line of credit), allow homeowners to borrow against the equity accumulated as their homes increase in value, and mortgages are paid down. Given the recent boom in home price gains across the U.S., it is perhaps unsurprising that U.S. homeowners are tempted to take out HELOCs. After all, they’re sitting on a huge pile of equity.

TransUnion said that approximately 10 million homeowners are expected to originate a home equity line of credit (HELOC) between 2018 and 2022. This would more than double the 4.8 million HELOCs originated in the previous five-year period (2012-2016).

“With aggregate home equity surpassing that of the housing boom in the mid-2000s, TransUnion is projecting between nine and 11 million consumers will originate HELOCs over the next five years,” said Joe Mellman, senior vice president and mortgage line of business leader at TransUnion.

TransUnion projects 1.4 million new HELOC borrowers in 2017 and 1.6 million in 2018, about a 30% increase from the previous two-year period of 2015 (1.1 million) and 2016 (1.2 million).

According to the study, there were 4.9 million HELOC originations in 2005 when home equity stood at $13.3 trillion. HELOC originations dropped to a mere 600,000 in 2011 as home equity declined to $6.3 trillion.

Home equity has once again risen to $13.3 Trillion in 2016, yet HELOC originations continued to be low at 1.2 million.

Are you wondering if you could be among the millions of people with this other outlet to borrow? Do you have students ready for college, ready for a home renovation, or just ready to have the vacation of a lifetime? Travis Credit Union currently offers HELOCs and 2nd mortgages for whatever life throws at you.

For more information about Home Equity Financing and if this type of loan is right for you, visit our website at traviscu.org/home-equity or call our mortgage and loan specialists at (707) 469-2000 or (888) 698-0000.

Home Equity Financing