Analysts see a home equity loan rise
Rising home prices and an improving economy are expected to spark a modest rebound this year in home equity lending. But lenders and homeowners will be more cautious about converting their equity to cash, muting any boost to the economy, said Greg McBride, a senior financial analyst.
“Home equity borrowing won’t be the economic crutch it was a few years ago,’’ said McBride.
As borrowers tap into the value of their properties, lenders will make about $36 billion in new home equity loans in the next 12 months, according to a forecast by Moody’s Economy.com in West Chester, Pa. That will increase the outstanding balances of the loans by 4.2 percent to $903.5 billion from a two-year low of $867.3 billion this quarter.
About $34 billion of home equity loans were made at the peak, in 2008.
Chris Lafakis – analyst, said there likely will be “modest’’ growth in home equity lending in 2010.
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Tags: home loans, Loans