Americans are again borrowing against their home equity, despite the still shaky housing market, according to CNBC. Even though more than 11 million borrowers are still underwater on their mortgages, there was a 19 percent jump in originations of home equity lines of credit at the end of last year, according to Equifax data.
Before the housing the housing market collapsed, many Americans used their home equity to bankroll extravagant lifestyles. And after 2008, home equity line originations dropped 55 percent.
But with home prices up 8 percent year-over-year in December, more Americans are again comfortable borrowing and confident that they can repay their debts.
“Home prices are definitely a factor” in the recent rise home equity lines of credit, Brad Blackwell, an executive with Wells Fargo Home Mortgage, said. “As they increase, people have more available equity.” [CNBC] —Christopher Cameron