NEW YORK CITY (Bloomberg News) – Home equity loans are expected to increase over the next year while the U.S. median home price is expected to increase in the second quarter, according to Moody’s and the National Association of Realtors (NAR).
Moody’s predicts that lenders will make about $36 billion in new home equity loans in the next 12 months, increasing the outstanding balances of the loans by 4.2 percent to $903.5 billion from a two-year low of $867.3 billion this quarter.
About $34 billion of home equity loans were made at the peak in 2008, according to Moody’s
Lenders will limit the home equity loans they grant to homeowners who owe less than their property is worth.
Another plus for the housing market is NAR’s expectation that property prices will rise this year for the first time since 2006.
The group predicts a 2.8 percent climb year over year to a median U.S. home price of $177,200 in the second quarter. That’s a $9,600 increase from the current quarter’s $167,600 median price.