Nearly half of all tappable home equity is held by borrowers with current interest rates of 3.75% or higher, according to the Mortgage Monitor Report released by the Data & Analytics division of Black Knight, Inc. (NYSE:BKI). The company’s data suggests that many homeowners have the opportunity to simultaneously reduce their interest rates while also tapping into record levels of available equity.

Indeed, Black Knight’s Optimal Blue rate lock data shows 42% of refinance loans locked through the first three weeks of June were cash-outs, the highest such share in more than two years. 

On the other side of the spectrum, nearly a quarter of tappable equity is held by borrowers with sub-3% interest rates. This could create increased demand for second lien home equity lending (including HELOCs) in coming years should 30-year rates continue to rise, making cash-out refinances a less attractive route to accessing equity for such homeowners.

According to Black Knight Data & Analytics President Ben Graboske, home price appreciation continues to break records, with ramifications that stretch across the real estate and mortgage markets.

“The Black Knight HPI shows home prices in May up nearly 18% from the same time last year,” said Graboske. “Frankly, home values are appreciating at rates we’ve simply never seen before, as low interest rates, ultra-scarce inventory and increasingly competitive homebuyers combine to create a truly unprecedented market.”

Black Knight says the rate of growth has been accelerating by more than 2% in each of the past two months, and May’s 2.1% rise marked the sharpest monthly jump on record. 

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