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Home Finance Balances Up for Third Straight Month

Outstanding home finance balances increased for the third straight month in January, signaling what might be the start of a long-term resurgence in borrowing, Equifax reported in its most recent National Consumer Credit Trends release.

According to the company, home finance balances outstanding totaled $8.59 trillion as of January. That number includes first mortgage, home equity installment, and home equity revolving balances. It was the first time in more than three years that balances have increased for a full three-month period.

“Home purchase transactions, in which first time homebuyers take on entirely new mortgage debt and move up buyers increase their existing mortgage debt, have finally overtaken foreclosures and accelerating pay-downs, resulting in increases [in] home finance balances,” said Equifax chief economist Amy Crews Cutts. “American consumers have shed more than $1.5 trillion in mortgage debt since the start of the financial crisis and only now seem interested in investing in housing again.”

From the start of 2013 to the start of this year, first mortgage balances increased 2.5 percent, rising from $7.7 trillion to $7.9 trillion—the biggest annual increase in more than three years. In that same time, total home equity balances fell more than 6 percent, dropping to $622.3 billion from $664.3 billion.

Meanwhile, from January 2013-2014, Equifax reports first mortgage delinquencies (at least 30 or more days overdue) dropped 22.8 percent, while home equity installment delinquencies fell 22 percent. Home equity revolving delinquencies were down 10.6 percent.


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