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Report: Homeowners Extremely Optimistic on Equity

Phil Hall
Feb 22, 2016
46 percent of all U.S. homeowners with a mortgage are expecting an increase in their equity this year

The power of positive thinking appears to be in overdrive, according to new data presented by the Irvine, Calif.-based lender loanDepot LLC that found 46 percent of all U.S. homeowners with a mortgage are expecting an increase in their equity this year, while only three percent expected a decline in equity. This optimism comes about even though 60 percent of homeowners acknowledged that equity in their homes already increased during the last three years.

Among those that anticipated more equity this year, 85 percent predicted as much as a 10 percent spike, while 27 percent forecast a six-to-10 percent uptick and 58 percent had relatively low expectations of a one-to-five percent rise.

“Homeowners who bought during the housing boom are regaining equity many thought was lost forever, yet too many are not aware of the equity they have gained or they are unclear about how to determine changes in their equity,” said Bryan Sullivan, chief financial officer of loanDepot LLC. “People who bought after the housing boom when prices were low are realizing homeownership can be a great investment and an asset that they can now leverage through equity to realize many dreams. Whether they choose to leverage their home equity now or reserve it for future needs, millions of homeowners have choices today not available just a few years ago.”

Separately, new data on home equity released by CoreLogic determined that lenders originated 976,000 home equity lines of credit (HELOC) during the first three quarters of 2015, with combined limited in excess of $115.8 billion. This represents the highest level of HELOC activity for this three-quarter period since 2008. However, the HELOC market is still far below its 2005 peak when originations totaled $364 billion.

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