Confidence in the housing sector seems to be growing with new home equity revolving lines of credit hitting a three-year high of $44 billion in the first seven months of the year, according to credit bureau Equifax.
The company released its October National Consumer Credit Trends Report, showing a 9% increase in revolving home equity from the recession's low point of $40.6 billion in new credit issuance back in 2010.
Since then, consumers have been warming to the idea of opening new lines of credit, albeit the thawing has been slow.
The write-off rate on home equity lines of credit declined 1.3% in September to a rate of 2.15%, which is the lowest level reported since April 2009.
Equifax noted that new lines of credit year-to-date through July reached 495,000 lines. That figure is still 76% below the seven-year high of 2 million lines of credit set in July 2006.
The total balance of severely delinquent first mortgages reached $419 billion in the first nine months of 2012, a 41% drop from March 2010. And the majority of the severely delinquent loans, or roughly 76%, are from 2005-2007 originations, which are known for having a higher rate of late payments.
"Increasing new home equity revolving credit indicates homeowner confidence and momentum towards an improved market," said Craig Crabtree, senior vice president and general manager of Equifax Mortgage Services. "While the levels are significantly lower when compared to pre-recession peaks, the recent stability has given way to consistent growth. Total first mortgages are still contracting, however the decreasing debt and delinquencies are positive signs of a stable foundation towards recovery."
Severely delinquent balances on agency sourced first mortgages, including FHA, Fannie Mae and Freddie Mac loans, have declined 13% to $125 billion from a peak of $145 billion in March of 2010.
Non-agency first-mortgage balances saw their delinquent balances fell 48%.