Gregory Englesbe, Investment Banker, Discusses Current Mortgage Lending Market

Gregory Englesbe, investment banker, says the amount of home equity available for homeowners to tap into is now at a record level.

Citing a recent Mortgage Monitor Report, Englesbe notes, "There is now nearly three times as much tappable equity available than at the bottom of the market in 2012."

There is now nearly three times as much tappable equity available than at the bottom of the market in 2012.

Gregory Englesbe

Investment Banker

Tappable equity -- the amount most lenders will allow borrowers to cash out, while still keeping 20 percent equity in the home -- grew by $256 billion in the second quarter of 2018, bringing total growth for the year to $636 billion. U.S. homeowners were sitting on more than $6 trillion worth of collective tappable home equity at the end of June.

Englesbe says approximately 44 million homeowners with mortgages can now access cash through cash-out refinances or home equity lines of credit (HELOCs). On average, per person, that's about $138,000.

As prices continue to rise, so too does the amount of home equity available for homeowners to tap. Despite this, Englesbe notes, "Rising interest rates are slowing this market. At this point last year, homeowners were tapping 17 percent more of available equity than today, which suggests that if rates on cash-out refinances and HELOCs had held steady, we'd see about $13 billion more equity being accessed."

"Gains in household wealth were cited by near-record numbers, primarily due to increases in stock holdings and rising home values," Englesbe noted. "The expectation is that homeowners will start to tap more equity in the coming year, especially for home renovation projects."

In 2018, remodeling spending by homeowners is estimated to increase by at least five percent in 41 of the 50 metropolitan markets tracked by Harvard's Joint Center for Housing StudiesĀ and none of the 50 major metro areas tracked are projected to see spending decline in 2018.

"That spending is expected to increase next year as well because fewer people are moving, due to higher home prices. There is still a shortage of homes for saleĀ and that is leading to more homeowners who might have wanted to move, staying put," Englesbe said.

Englesbe is an investment banker, philanthropist and prominent businessman located in Palm Beach, Florida.

Media Contact: A. Bell - 800.793.9633

Source: Gregory Englesbe


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