Bloomberg News says following the burst of the housing bubble that put almost 25 percent of U. S. mortgages underwater, home equity in the first quarter rose to $6.7 trillion, its highest level since 2008, as homeowners refinanced their mortgages in droves, the biggest jump, percentage wise, in 60 years. According to Freddie Mac, 50 percent of the mortgages in the fourth quarter reduced loan size, another record. Richard DeKaser, of the American Banker’s Association (ABA), says, “The willingness of homeowners to carry housing debt has been radically altered. When the market was booming, a mortgage was used as a leveraging tool, and now it’s seen as a risk.” Federal Reserve data shows residential mortgage hit its high point of $10.6 trillion in 2007, but has since fallen seven percent while residential property value has fallen 23 percent. The average mortgage term fell two years, to 27 years, from Feb. 2012 to March. MHProNews has learned 79 percent of all mortgage applications in April were for refinancing to take advantage of rock bottom interest rates.
(Image credit: Caudium)