Despite holding trillions of dollars in home equity, U.S. homeowners are struggling to tap into it according to a report published by Point, an alternative equity release company.
“Point’s newest analysis shows an alarming trend—many U.S. homeowners don’t have a clear path to accessing their home equity. Riding the wave of rising real estate values, homeowners in the U.S. are sitting on near-record-high levels of home equity”, says the report.
Homeowners have been paying down existing home equity loan balances, dropping 48% from its peak in 2009. However, those wishing to tap into their equity find themselves facing significant headwinds. One is tightening credit standards from banks and lenders reducing the number of qualified applicants. In addition to stricter lending guidelines, a steady series of interest rate hikes by the Federal Reserve made home equity loans less attractive for potential borrowers.
Point’s publication notes that a homeowner who purchased their home in the summer of 2020 for $310,000 would likely see their home’s value climb to…
