Mortgage demand may be coming back, slowly but surely, with home equity installment balances rising a slight 0.3% in August, according to credit bureau Equifax.
This is the first uptick in home equity installment balances in five years. Still, Equifax says demand for equity loans fell 43% from August 2007 to 4.4 million in August 2012.
It will take a significant uptick in demand to close that gap even halfway, but the new Equifax report is hopeful a turnaround is in play.
Demand for home equity loans grew in states like New Mexico (with loan balances up 2.3%) in August. Other states experiencing at least 2-percentage point increases included California, Nevada, Colorado and Florida.
"The residential real estate market finally seems to be finding solid ground," said Equifax chief economist Amy Crews Cutts. "We're seeing signs that the contraction in mortgage debt is slowing and delinquencies continue to trend down at the same time that mortgage rates set new record lows on almost a weekly basis. The environment has been set for growth for a while – now it looks like it may finally be happening."