Home Equity Hits a Record High and Here’s What Homeowners Are Spending It On
Homeowners are accruing record amounts of home equity, thanks to fast-rising values in today’s housing markets. It comes as no surprise that people are starting to tap into that cash. What are they spending it on? Most opt to make their homes even more valuable.
According to a survey released in December 2017 by TD Bank, 80 percent of borrowers taking out home equity lines of credit say they would consider using the money to renovate their homes.
“We’re not only seeing more requests for proposals, but more committed projects from home owners,” said Steve Cunningham, a remodeler from Williamsburg, Virginia, in a report from the National Association of Home Builders. “In addition to regular updates and repairs, there’s been an uptick in more ambitious large remodel requests.”
Older housing stock combined with not enough new homes being built means people are choosing to renovate.
Homeowners are also using home equity cash for education expenses and to pay down other debt so they can lower their monthly bill payments. Other homeowners are investing in the stock market or buying more real estate. Among borrowers, there is a strong confidence that home values will continue to rise, says Matthew Weaver, vice president of sales at Finance of America Mortgage.
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