NEW YORKâCredit unions might want to consider home equity loan campaigns for the Spring. According to a new survey, most Americans do not realize the gains they have seen in home equity since the recession.
As a result, most are underestimating what their home is worth and the amount of equity available to them.
CNBC reported that same survey also found that just more than half of homeowners with a mortgage don't expect to gain any equity in 2016, despite rising home prices.
Fifty-seven percent of homeowners surveyed said they believe their home value has improved in the last three years, but the majority, 80%, underestimated the amount of value it has gained, according to a new survey conducted by Omniweb and commissioned by loanDepot. The survey was based on interviews with 1,000 borrowers, split evenly between men and women.
According to CNBC, more than a quarter of those surveyed, who do believe their homes have gained value, said it had increased between 1% and 5% since 2013, even though in most markets nationally home values have gained about 10% in that time, according to the S&P/Case Shiller Home Price Index.
Perhaps not surprisingly, a recent survey by TD Bank found just 9% of borrowers surveyed would definitely consider applying for a HELOC. Sixty-one percent would not consider it at all.
According to CoreLogic, during the first three quarters of 2015, lenders originated 976,000 new HELOCs, the most since 2008, but dollar volumes are still barely a third of what they were at the last peak in 2005.
CNBC reported that those who are taking money out of their homes are doing so at a very conservative rate. Total home equity nationwide has increased by nearly $1 trillion in just the last year, the highest since 2007, according to Black Knight Financial Services. Borrowers, however, are not tapping it. Those who are taking out home equity lines of credit, are not withdrawing as much cash from their homes as is available to them, CNBC said.