The housing crisis turned many owners conservative, but a rebound in home values and increase in homeowner wealth have encouraged borrowing.
CNBC reports that home equity lines of credit (HELOC) volume is up 21 percent over the last two years, to the highest level since 2008. Owners are taking their money and investing it in their homes through home improvement projects.
Rising interest rates have limited some owners from cashing out. Home equity is rising faster than borrowers are withdrawing it.
Homeowners are clearly leaning toward more leverage, but they are doing so in a far different environment than in 2006. Mortgage underwriting is far stricter, especially for home equity loans, and borrowers must prove their ability to repay loans, including all financial documentation.
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