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Investing: New Record Home Equity Levels Could Spur Buying Spree

by blogger1
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on Thursday, 25 January 2018

New record levels of home equity could spur a new real estate buying spree this year.

According to Freddie Mac US homeowners are enjoying a new record high level of home equity. Freddie Mac puts this at close to $14T as of last year, and only growing. What will the impact be for the real estate market and investors?

Black Knight Data & Analytics says that US homeowners have at least $5.5T in tappable home equity. That’s without them having to break the 80% LTV mark with home mortgages, and leaving a nice 20% equity cushion in their homes.

This makes home equity loans and HELOCs one of the biggest loan trends this year. It is going to be one of the saving factors for banks and conventional mortgage lenders. Expect them to compete heavily to make these loans through 2018.

In fact, CNBC reports that homeowners have already been tapping into billions of dollars of their home equity through new loans and lines of credit. Billions have been spent on remodeling, and investing in stocks and even bitcoin. A lot is also going into real estate.

This sizable equity position puts homeowners in a great position for selling their homes, and buying new ones while interest rates are low. For some, this will be downsizing and keeping the change. For others it will be moving up. Many could use this cash windfall to invest in real estate.

All real estate investors need to be aware of this situation and trends. It is a huge opportunity not to be missed. Educate and make others aware of the home equity and finance options they may have. Let them know about private money lending opportunities for funding rehabbers, or rehabbing homes and loaning to rental property investors. You may even want to get them on new lists for marketing your real estate opportunities so you can sell deals to them, or partner with them.

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