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The MReport Webcast: Thursday 10/9/2014

Home equity lending made solid strides in the last year but still has a lot of ground to cover to return to pre-crisis levels, according to a new report released by housing data firm RealtyTrac on Thursday. In its first-ever U.S. Home Equity Line of Credit Trends Report, the company revealed that lenders originated nearly 800,000 HELOCs in the 12 months ending in June, up 20.6 percent from the prior period and the highest level since the year ending June 2009. For the first eight months of 2014, RealtyTrac reported HELOCs made up 15.4 percent of all loan originations nationwide, a post-crisis high.

Despite the build-up in home equity loan volumes over the last two years, originations remain 76 percent below their peak in 2005 and 2006, when HELOCs accounted for nearly a quarter of lending activity. The peak-to-current gap is more pronounced for some markets—like California’s Riverside-San Bernardino, where home equity originations are down close to 100 percent from their level before the crash.

Mortgage application volumes kicked off the month with a small increase as interest rates tumbled a few points, according to industry data. The Mortgage Bankers Association's weekly measure of mortgage applications rose 3.8 percent for the week ending October 3rd, the group reported Wednesday. The MBA's gauge for refinance activity increased 5 percent from the previous survey, spurred by a decline in interest rates. Meanwhile, applications for home purchases increased 2 percent, ending the week down 8 percent compared to a year ago.

About Author: Jordan Funderburk


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