Americans Are Tapping Home Equity Despite Jump in Rates
- Deals are being driven by the need for cash, Black Knight says
- Home improvement, debt consolidation are key spending areas
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Soaring mortgage rates aren’t stopping plenty of US property owners from tapping home equity -- even if it means locking in a steep increase in their monthly repayments.
In July, 86% of refinance deals required homeowners to pay a higher interest rate, the biggest share on record, according to data from Black Knight Inc., an analytics firm for the mortgage and home-equity industry. The rate increased by an average of 1.3 percentage points, also a record high, the data show. Two years ago, virtually all refinance loans lowered the mortgage rate even if they pulled equity too.