Home equity credit hits three-year high

ATLANTA, Oct. 16, 2012 /PRNewswire/ -- New home equity revolving lines of credit totaled more than $44 billion through July 2012, which is a three-year high and signals growing confidence in the housing market. The date comes from Equifax's October National Consumer Credit Trends Report. 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. 

Other highlights from the most recent data include:

Home Equity Revolving

  • The number of new revolving home equity lines of credit year-to-date through July 2012 stood at 495,000, a three-year high, 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 in September 2012 billion 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.

First Mortgage

  • The total balances of severely delinquent mortgages through September 2012 ($419 billion) have decreased 41% since peaking in March 2010 ($714 billion). Of note is that more than 76% of severely delinquent balances among home equity revolving credit balances are sourced from originations between 2005-2007.
  • First mortgage balances of $7.85 trillion in September 2012 decreased 3.4% from the same month a year ago.
  • Severely delinquent balances among agency sourced first mortgages (FHA, Fannie Mae and Freddie Mac) have fallen more than 13% to $125 since peaking in March 2010 ($145 billion). In that same time, however, non-agency sourced (private investors and banks) first mortgage balances showed a 48% decrease.
  • First mortgages opened between 2005-2007 comprise 68% of severely delinquent mortgage balances yet they represent just less than 27% of all first mortgages outstanding.

"Increasing new home equity revolving credit indicates homeowner confidence and momentum towards an improved market," said Craig Crabtree, senior vice president and general manager, 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."

About Equifax, Inc.

Equifax is a global leader in consumer and commercial information solutions, providing businesses of all sizes and consumers with information they can trust. We organize and assimilate data on more than 500 million consumers and 81 million businesses worldwide, and use advanced analytics and proprietary technology to create and deliver customized insights that enrich both the performance of businesses and the lives of consumers.

Headquartered in Atlanta, Equifax operates or has investments in 18 countries and is a member of Standard & Poor's (S&P) 500® Index. Its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. For more information, please visit www.equifax.com.