Equifax

Finance Blog

Four Signs That the Housing Market Is Recovering

Written by Ilyce Glink on April 15, 2013 in Real Estate  |   No comments

After years of drowning with underwater mortgages, American homeowners are starting to swim toward the shallow end as the housing market recovers. Rising home values and increased home equity are spelling relief for many people. Here are four signs that the housing market is recovering:…

housing market real estate marketAfter years of drowning with underwater mortgages, American homeowners are starting to swim toward the shallow end as the housing market recovers. Rising home values and increased home equity are spelling relief for many people.

Here are four signs that the housing market is recovering:

1. Unemployment is falling.

In order to have a strong real estate market, you need a strong job market. The unemployment rate fell to 7.7 percent in February, its lowest level since December 2008. February saw 236,000 jobs added to the U.S. economy, which is more than was expected.

2. Home equity is increasing.

Almost two million homeowners moved into a positive home equity last year, according to a recent report from real estate website Zillow.com.

While 15.7 million people had underwater mortgages at the end of 2011, meaning that they owed more on their mortgage than their home was worth, that number dropped by 12 percent to 13.8 million people at the end of last year. Zillow forecasts another 7 percent of homeowners will also have positive home equity by the end of 2013, mostly due to increasing home values.

3. Home values are rising.

Home prices across the country climbed 9.7 percent in January from a year ago, the largest increase since April 2006 and the 11th straight month home prices have risen nationally, according to a new home price index report from CoreLogic. The report showed that all states, except for Delaware and Illinois, saw year-over-year price gains.

4. Home equity lines of credit are rising.

Home equity lines of credit (HELOC) are also on the rise, with a 19 percent increase in originations at the end of 2012. However, this is considerably lower than the pre-recession peak in 2006, according to an Equifax report.

HELOCs can still be difficult to get, and lenders tightened their borrowing requirements after the financial crisis and housing market collapse when they lost billions of dollars worth of loans. While lending has increased, lenders are staying conservative. The average home equity line in October 2006 was more than $100,000. It was slightly below $90,000 in October 2012.

Lenders are giving loans to the people with the highest credit scores, so if you can’t get a loan right now, you might want to spend time improving your creditworthiness. People with lower credit scores might receive higher interest rates or not be able to take out a loan at all.

To see if the housing market is recovering in your neighborhood as spring comes into bloom, watch for more pending home sales and more homes increasing in value.

Ilyce R. Glink is the author of several books, including 100 Questions Every First-Time Home Buyer Should Ask and Buy, Close, Move In!. She blogs about money and real estate at ThinkGlink.com and at the Home Equity blog for CBS MoneyWatch.

No comments yet


Leave a Comment


Name :


Commenting guidelines

We welcome your interest and participation on this forum, but be aware that comments will be published at Equifax's sole discretion. Please don't use this blog to submit questions or concerns about your Equifax credit report or raise customer service issues. Instead, you should contact Equifax directly for all such matters and any attempts to do so in this forum will be promptly re-directed.

Some other factors to consider when commenting:
  1. Registration and privacy. While no registration is required to visit our forum, participants wishing to post a message must register by creating an account. All personal information provided by forum members incident to registration is governed by our Terms of Use and Privacy Policy.
  2. All comments are anonymous. We'll delete your name, e-mail address, and any other identifying information, including details about your investments.
  3. We can't post or respond to every comment - As much as we'd like to, we can't post every comment, nor can we guarantee that we will respond to each individual message. All questions or comments about your Equifax credit report or similar customer service issues should be handled by contacting Equifax directly.
  4. Don't offer specific legal, tax or financial advice. All of the materials on this Site are for information, education, and noncommercial purposes only and this forum is not intended as a means of expressing views or ideas regarding any specific legal, tax, or investment advice. While offering general rules of thumb is both permitted and encouraged, recommending specific ideas or strategies regarding investments, taxes, and related matters is prohibited.
  5. Credit Repair. This blog is not intended as a venue for the discussion or exchange of ideas regarding credit repair or other strategies intended to assist visitors and community members improve or otherwise modify their credit histories, ratings or scores.
  6. Stay on topic. Your comment should be concise and pertain to the specific post in question.
  7. Be respectful of the community. The use of profanity, offensive language, spam, and personal attacks will not be tolerated and egregious or repeat offenders will be banned from future participation. We encourage disagreement and healthy debate, but please refrain from personal attacks on our WordPresss and contributors.
  8. Finally: Participation in this forum may be terminated by Equifax immediately and without notice for failure to comply with any guidelines or Terms of Use. As such, you should familiarize yourself with all pertinent requirements prior to submitting any response through the blog or otherwise. All opinions expressed in this forum are solely those of the individual submitting the comment, and don't necessarily represent the views of Equifax or its management.

Equifax maintains this interactive forum for education and information purposes in order to allow individuals to share their relevant knowledge and opinions with other members and visitors. We encourage you to participate in discussions about personal finance issues and other topics of interest to this community, but please read our commenting guidelines first. Equifax reserves the right to monitor postings to the forum and comments will be published at our discretion. Do you have questions or comments about your Equifax credit report or customer-service issues regarding an Equifax product? If so, please contact Equifax directly. All opinions and information expressed or shared in blog comments are solely those of the person submitting the comments, and don't necessarily represent the views of Equifax or its management.


Real Estate Archive

Stay Informed Sign up for our FREE Equifax email Newsletter