Black Knight: Tappable Home Equity Rises to $4.4 Billion

Sorohan, Mike msorohan@mba.org

July 12, 2016


Black Knight Financial Services, Jacksonville, Fla., said homeowners' tappable equity rose by $260 billion in the first quarter to $4.4 trillion, within 10 percent of its 2005 peak.

The company's First Look Mortgage Monitor said more than $75 billion in equity has been extracted over the past 12 months; even then, tappable equity is still up by more than $550 billion from last year.

The report also said 38 million borrowers now have at least 20 percent equity, averaging $116,000 per borrower. Rising home prices also lifted another 425,000 borrowers out from underwater on their mortgages, although 2.8 million remain in negative equity positions, nearly five times as many as in 2004.

"Equity levels are rising nationwide for the most part," said Black Knight Data & Analytics Executive Vice President Ben Graboske. "It seems borrowers are still being prudent when it comes to drawing upon that equity, though."

Graboske said homeowners tapped just $20 billion in equity via cash-out refinances in the first quarter--one-half of 1 percent of total available equity.

The report said 15 percent of all active mortgage holders have some level of student loan debt, representing an increase of more than 40 percent over the past 10 years. Overall non-current rates are 38 percent higher for borrowers carrying student loan debt; however, when compared to mortgages with similar credit scores, the disparity becomes decidedly less pronounced. Fewer than 1 percent of all active mortgages belong to borrowers who are 90 or more days past due on their student loan debt.

"However, it should be noted that borrowers severely delinquent on student loan debts are five times more likely to be delinquent on their mortgages than those who are current on student loan debt, and nearly six times more likely to be delinquent than the average borrower without any student loan debt at all," Graboske said.

Other report highlights:

--Home prices rose in May to just 3 percent off their June 2006 peak ($268,000); 23 states have already passed their home price peaks.
--The total U.S. loan delinquency rate rose to 4.25 percent in May an 0.36 percent increase from April.
--The total U.S. foreclosure pre-sale inventory rate fell to 1.13 percent in May, down by 3.55 percent from April.
--States with highest percentage of non-current loans were Mississippi, Louisiana, New Jersey, Maine and Alabama.
--States with lowest percentage of non-current loans were Montana, South Dakota, Minnesota, Colorado and North Dakota.
--States with highest percentage of seriously delinquent loans were Mississippi, Louisiana, Alabama, Arkansas and Rhode Island.

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