ADR BLOG

HELOC Usage hits all time low

October 10th, 2018 2:16 PM by Andrew Walter May CEO

As stated in last year's Fall Newsletter, the Trump Administration put the breaks on easy access and usage of Home Equity Lines of Credit. HELOCs cost about 2 to 2.5% more than a 30 year fixed (think 7%). That's one reason. The other is new HELOCs are no longer tax deductible. According to industry data (Black Knight) HELOCs have fallen hard. Despite a run-up in home equity (See next article) only 1.17% of that run-up has been pulled out in any form (and that includes a cashout refinance - where rates are around 4.375% on a 30 year fixed).

It's still a sellers' market, but home ownership is a great way to use leverage to offset your taxes and experience home appreciation without throwing money at rent (avg rent in Raleigh was $1500 according to Zillow). Home prices are expected to grow 5.3% in 2019. On a $300k home that's $15,900 in price appreciation - or the entire value of the rent checks you will write to live in the same property. Not every city has this lopsided value equation.

For more info regarding HELOCs and why you DO NOT want one, check out Why HELOCs are dead.

Posted in:General

Posted by Andrew Walter May CEO on October 10th, 2018 2:16 PM

ADR BLOG

HELOC Usage hits all time low

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