Market Trends of US Home Equity Lending Industry
Home Equity Lending Market is Being Stimulated By Rising Home Prices
US house prices grew 8.8% in the current year, following an increase of 12.2% in the previous quarter. The cost of purchasing a home increased as a result of higher mortgage rates. However, those significant jumps may level off. While buyers struggle in this challenging market, homeowners are witnessing rising home values. Homeowners are benefiting from greater equity gains as a result of rising home values.
Increasing Share of Homeowner Equity in Real Estate Property of US is Driving the Market
Home equity value is calculated by subtracting the value of the remaining mortgage debt from the market value of the real estate property. That means that the ratio share of home equity to real estate property value increases as the debtor pays off the mortgage. Homeowner equity as a percentage of household real estate in the United States amounted to 71.23 percent in 2022 and has been increasing steadily.
There is an increase in technology-savvy homeowners in the market, so there is more need for digitalization in the process of home equity loans. There is an increase in investments in the automation of mortgages. Data and technology solutions are increasingly used by lenders to survive and grow in the market. In addition, digitalization in the loan origination process helps technology henceforth, reducing friction in the process. The use of artificial intelligence is increasingly adopted by home equity loan originators to give a personal touch and personal advice. Henceforth, advancements in technology provide an easy way for clients to take loans. Technology facilitates home equity closings as well, through tools such as EXOS Close, an app that enables the borrower to self-schedule their closing by gaining direct access to signing agents' availability, and remote and hybrid signing options. Each of these helps lenders create a differentiated customer experience that includes getting to the closing table faster.
