Outstanding First Mortgage Balances Near Pre-Recession Highs

Equifax, Atlanta, said outstanding first mortgage balances in February reached $8.81 trillion, edging closer to the record high $9.04 trillion in 2008.

The company’s monthly National Consumer Credit Trends Report said first mortgage balances have added more than $1 trillion since bottoming out in 2013.

“Despite nearing the pre-Great Recession peak in nominal terms, the market for first mortgages is in a much healthier place than in 2008, with low interest rates and normalized home prices supporting affordability” said Gunnar Blix, Deputy Chief Economist for Equifax. “Borrowers are also taking advantage of favorable used car prices and opportunities to consolidate high-interest debt with consumer finance loans.”

Other report highlights:

–Home Equity loan originations rose by 11.0%, with volume up by 12.3%;

–Total outstanding balances on auto loans and leases have increased by 4.8% year-over-year to $1.24 trillion. Outstanding accounts increased by 3.8% from a year ago to 85.6 million;

–Outstanding consumer finance revolving accounts grew by 5.3% over the past year, from 49.3 million in February 2017 to 51.9 million.

The report sad for calendar year 2017, 7.27 million first mortgages were originated, representing a 13.2% decrease from the same period in 2016, driven by fewer refinances as interest rates rose. By contrast, nearly 1.45 million HELOCs and 771,300 home equity installment loans were originated for the same timeframe, representing 1.1% and 12.3% increases from the previous year, respectively.

Equifax said home equity loan balances and accounts outstanding have steadily declined since their respective peaks in 2007. Balances are down 65.2% from peak, while accounts are down 60.8% as of January. Outstanding HELOC balances totaled $418 billion, a 6.2% decrease in total balances from a year ago, and a 38.2% decline from the May 2009 peak of $677 billion.

Equifax also noted dollar amount of student loans originated in 2017 totaled $113.6 billion, a 3.0% increase over the previous year, while the average loan amount increased by 4.0%.