ATLANTA–Consistent with other data from the housing market, including ongoing declines in foreclosures, Equifax is reporting that the total balance of write-offs through the first quarter of 2016 for first mortgages, home equity lines of credit, and home equity loans is $9.5 billion, a nine-year low for Q1 and a year-over-year decrease of 22.7%.
"Homeowners are in the best financial shape they've been in since well before the start of the Great Recession," said Amy Crews Cutts, senior vice president and chief economist at Equifax, in a statement. "Total mortgage debt is down over $1 trillion, owner's equity is up to $12.5 trillion, nearly double the amount held in 2011, and low inventories of homes for sale are driving prices up at a modest pace. Moreover, the average interest rate on outstanding mortgage loans keeps falling as more and more homeowners refinance into rates below 4%, giving borrowers more spending capacity each month.”
Equifax reported that lending standards remain very tight, with the median Equifax Risk Score on a new first mortgage running at 749 in Q1. On newly originated home equity lines of credit, the median credit score much higher at 788.
Equifax said the data also show ongoing improvements in severe delinquency rates. Balances 90-days past due or in foreclosure and as a share of total balances, the year-over-year declines in March include:
- First mortgage: from 2.35% to 1.65%
- Home equity instalment loans: from 1.98% to 1.59%
- Home equity revolving lines of credit: from 1.47% to 1.33%