Experian–Oliver Wyman data reports $120 billion in new home-equity credit loans in past year;Q2 2014 saw new mortgage originations totaling $292 billion
Mortgage origination volumes saw an increase of 15 percent in Q2 2014. Home-equity line of credit (HELOC) lending saw the biggest gains, according to Experian, the leading global information services company, as reported in its quarterly Experian–Oliver Wyman Market Intelligence report.
Is the home refinancing boom over?
“Home lending had an incredible two-year period from Q2 2011 to Q2 2013, with $4 trillion in mortgage origination volume; 71 percent of that, or $2.9 trillion, came from home refinancing,” said Linda Haran, senior director of product management and strategy for Experian Decision Analytics. “A look behind those numbers tells us that the total dollars originated over the past four quarters are about $1.3 trillion versus $1.8 trillion, showing a 30 percent decrease in annual origination volumes from the refinancing boom.”
“However, those last four quarters show us that the mix of purchase-to-refinance volume has shifted to a fifty-fifty split between refinance and purchase volume activity. This equates to new purchase activity increasing by 22 percent in Q2 2014 from last year, signaling that consumers are getting back into the market. In the long term, this appears to set up the market for continued purchases into spring and summer of 2015.”
$35 billion in new HELOC lending from Q2 2014
Home-equity lending increased 25 percent in Q2 2014 totaling $35 billion in new HELOC originations compared with Q2 2013. Looking at the past 12 months, HELOCs totaled $120 billion in new originations, representing a 27 percent increase compared with the previous 12 months.
HELOC lending growth seen across all regions
Double digit growth was seen in all regions compared to the numbers reported one year ago. The two regions that led the trend in increasing HELOC origination volumes were the West Coast and the Northeast — with 27 percent and 15 percent year-over-year growth, respectively.California accounted for the highest volume of HELOC dollars originated in Q2 with $5.9 billion, followed by New York with $2.2 billion and Pennsylvania with $2.0 billion.
Make sure to join us for the Q3 2014 Experian–Oliver Wyman Market Intelligence Report webinar.
For even more HELOC analysis, please read the "Impact of the revived HELOC trend" post.
About the data
The data for this insight and analysis was provided by Experian’s IntelliViewSMproduct. IntelliView data is sourced from the information that supports the Experian–Oliver Wyman Market Intelligence Reports and is accessed easily through an intuitive, online graphical user interface, which enables financial professionals to extract key findings from the data and integrate them into their business strategies. This unique data asset does this by delivering market intelligence on consumer credit behavior within specific lending categories and geographic regions.