CoreLogic data show that home equity lending has been increasing steadily in the past couple of years, with HELOC originations doubling from about a $50 billion 12-month cumulative amount right after the recession.
CoreLogic economist Sam Khater wraps his brain around what's behind this lending growth, and what it says about the fundamental health of the housing market. He notes that the number of homeowners whose loan to value ratios are either below 50% or between 50 and 75% has mojo. Plus, there's traction among borrowers who are still underwater in their loans vs. the value of their homes. Khater writes:
At the end of the first quarter of 2015, there were 5.1 million mortgages with negative equity, down sharply from 5.4 million the quarter before. In dollars, aggregate negative equity fell by nearly $12 billion between the fourth quarter of last year and the first quarter of this year.
Household balance sheets are starting to look pretty good.