Home equity lines of credit (HELOC) originations rebounded to begin the year, a sign that homeowners have shrugged off changes to the federal tax code that eliminated some incentives for using equity lines.
First-quarter new HELOC counts totaled 347,875 in the January-through-March period, which was up 18 percent over the previous quarter and up 14 percent from a year ago, according to a preliminary estimate from Attom Data Solutions.
homesqueeze(1)“We had seen HELOCs trending down the previous two quarters,” said Daren Blomquist, senior vice president with Attom Data Solutions, during a telephone interview. “It seemed to be an indication that maybe, because of tax reform or other reasons, folks were starting to pull back on HELOCs. But then, we saw this jump in the first quarter that was a little surprising.”
Last year’s tax overhaul partially preserved a deduction on mortgage interest on equity lines for people who itemize. Homeowners, however, can now only claim the deduction on the debt used to make home improvements.
Blomquist said the latest numbers suggest that HELOCs are gaining favor again after suffering initially from the uncertainty over the tax issue. New HELOC counts in the fourth quarter clocked in unusually low, at 293,570 new lines, according to a preliminary estimate from Attom Data.
Souce: Scotsman Guide News