The real estate rollercoaster takes a dip in October, with median home prices plummeting by a staggering 17.6% to $409,300—a stark contrast to the peak of $496,000 in October 2022. This significant downturn surpasses the real estate crash of 2008, raising eyebrows and prompting a shift in financial strategies.
Amidst the housing turbulence, there’s a notable uptick in curiosity about home equity loans. Online searches for “HELOC” (home equity line of credit) have spiked by an impressive 305% this year, hitting an all-time high in July 2023, according to a Google traffic analysis by real estate platform RubyHome.
Yet, this isn’t just about curiosity—many are actively embracing home equity loans. Research from ATTOM, a curator of real estate and property data, reveals a surge in lenders originating over 284,000 HELOCs in the second quarter of the year—a substantial increase from the 251,975 HELOCs opened in the initial three months of 2023. A report from the Mortgage Bankers Association projects an 11% rise in debt from home equity loans, including HELOC’s fixed-rate counterparts, throughout 2023.
Why the sudden interest in home equity lending? Despite a general rise in interest rates over the past year, borrowing against homeownership remains an attractive option, especially compared to alternatives like mortgage refinancing or other types of loans. This trend is particularly pronounced for those seeking cash for home remodeling, renovation, or repair—primary reasons individuals tap into their home equity.
In a market characterized by rapid property value fluctuations, the growing fascination with home equity loans reflects a pragmatic approach by homeowners navigating financial uncertainties, seeking stability, and flexibility in the face of an evolving real estate landscape.
🚨NEWS: 🏡 PRICES -17% 📉
🔘 Median October sale price for new homes in Oct: $409,300 down -17.6%
— The Coastal Journal (@1CoastalJournal) November 27, 2023