Although outstanding balances on all home-secured credit products diminished, new activity on credit lines secured by residential properties is strengthening.
As of February, 49.9 million first mortgages were outstanding for $8.1501 trillion as of February, off just $0.0038 trillion from a year earlier.
Write-offs on first mortgages worked out to 5.2 BPS as of February. That was down 30 percent compared to the same month last year.
Equifax delivered the data in its National Consumer Credit Trends Report.
On closed-end home-equity loans, there were 4.6 million accounts outstanding, 10.9 percent less than in February 2014.
The balance of HELs outstanding fell 16.9 percent to $0.1372 trillion.
Write-offs on HELs
dropped 18 percent to 8.1 percent.
U.S. lenders originated more than $120 billion in home-equity lines of credit in 2014, an improvement of 21.5 percent over 2013.
That was the highest level of HELOC volume experienced by the HELOC lending sector in six years.
New HELOCs opened last year numbered 1.2 million. That was a 15.8 increase compared to the previous year and also a six-year high.
Amy Crews Cutts, chief economist at the data provider, noted that the growth reflects “sizable equity” regained in homes.
“Nationally home values have increased about 26 percent on average since January 2011,” Cutts said in the report. “Many homeowners with a low-rate first mortgage will be reluctant to refinance that mortgage into a higher rate and rules for cashout refinance are quite onerous relative to home equity loans.”
Cutts predicts that interest in HELOC is likely to grow over the next several years as borrowers avoid tampering with low rates on their first mortgages.
There were 11.4 million HELOCs outstanding in February, 5.0 percent fewer than a year earlier.
The balance of outstanding HELOCs fell 3.2 percent to $0.5122 trillion.
Equifax said that HELOC write-offs as of February 2015 were 4.3 basis points, a one-third decline from February 2014.
Cutts explained the falling write-offs reflect improved employment and rising home values.
“These trends show no signs of slowing so 2015 should see further improvements in mortgage and home equity loan performance,” she said.
