Tappable mortgage equity hit all-time high in 2017
The amount of tappable mortgage equity increased in 2017 to an all-time high, according to Black Knight’s latest Mortgage Monitor report. Tappable equity, the amount available for a homeowner to borrow against before reaching a maximum 80% loan to value, increased to an all-time high of $5.5 trillion in the third quarter of 2017. This is up a significant $3 trillion from the market’s bottom in 2012.In fact, currently, more than 80% of all mortgage holders now have available equity to tap via cash-out refinances or HELOCs.Rising home prices have not only decreased tappable equity, but also continued to decrease the number of underwater borrowers. In the third quarter last year, just 2.7% of all borrowers, or about 1.36 million, now owe more on their mortgage than what their home is worth.This is a decrease in negative equity borrowers of a full 37%, or 800,000 borrowers, from the start of 2017.But even as homeowner equity continues to grow, cash-out refinances decreased 14% from the third quarter 2016 to the third quarter 2017 due to rising interest rates. Those who did draw equity via cash-out refinances in the third quarter withdrew an average $68,000 in equity, down slightly from $69,000 the previous quarter.
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