U.S. Homeowners Tap $47 Billion in Equity as Cash-Out Refinancing Jumps 18%
Updated
Updated · The New York Times · Aug 12
U.S. Homeowners Tap $47 Billion in Equity as Cash-Out Refinancing Jumps 18%
3 articles · Updated · The New York Times · Aug 12
Summary
$47 billion in home equity was withdrawn in the first quarter, up 2% from a year earlier, as cash-strapped homeowners leaned on housing wealth to cover expenses.
$22 billion came from cash-out refinancing, up 18% year over year, while second mortgages totaled $25 billion, up 1%, showing borrowers increasingly favoring ways to unlock equity without selling.
$35 trillion in total home equity and an average $310,500 per homeowner have built up partly because owners who locked in mortgage rates near 3% are reluctant to move.
At 6.69%, a 30-year mortgage still looks cheaper than double-digit credit-card rates, and lenders say the money is increasingly going to pay down credit-card and student-loan balances rather than discretionary spending.
The borrowing trend underscores how solid consumer spending is being supported by household balance-sheet strain even as debt loads rise and the labor market softens.