Many homeowners don’t realize they have home equity to tap, while banks have pulled back on loan amounts and other types of loans have become cheaper, the Wall Street Journal reported today. Home equity has roughly doubled to $12.1 trillion since house prices hit bottom in 2011, according to the Federal Reserve. As a result, a key gauge of housing wealth — homeowners’ equity as a share of real estate values — is nearing the point seen a decade ago, before the downturn. In the first half of the year, owners borrowed $43.5 billion against their homes with home-equity loans and lines of credit, according to trade publication Inside Mortgage Finance. That was 45 percent higher than in the first half of 2014, but scarcely a quarter of the amount seen when equity was last as high in 2007. Meanwhile, cash-out refinances, which let homeowners take out a new mortgage and tap some of the home’s value at the same time, were up 48 percent in the three months ended in August from the year-earlier period, according to Black Knight Financial Services. But they remain below the level seen in the summer of 2013.
