With the high prices in the nine-county Bay Area, more homeowners are taking advantage of available credit, according to a new report. On a year-over-year basis in June, there was a 16 percent increase in loans to $33 billion from the 71 credit unions headquartered in the Bay Area, according to the California Credit Union League.

  • In the entire nine-county Bay Area, 83 percent of the total 1.03 million mortgages had a minimum 20 percent equity as of June of this year.
  • There was a 16 percent increase in loans to $33 billion as of June 30, 2016, a 78 percent increase since the post-recession low in 2010.
Larkspur

Larkspur/Behzad Zandinejad

With the high prices in the nine-county Bay Area, more homeowners are taking advantage of available credit, according to a new report. On a year-over-year basis in June, there was a 16 percent increase in loans to $33 billion from the 71 credit unions headquartered in the Bay Area, according to the California Credit Union League.

As of June 30, there was a 5 percent increase annually in the number of new members, which was a record high for the area peaking above 2.5 million.

In the second quarter of 2016, homeowners were increasingly heading into Home Equity Lines of Credit (HELOCs), home equity loans (second mortgages) and cash-out refinance mortgages, the report shows. In home equity loans specifically, there was an 11 percent annual increase, reaching an outstanding $3.9 billion, or a 41 percent increase from the post-recession low.

“The local surge in home-equity lending and cash-out refis reflects a strong national trend in homeowners increasingly remodeling their homes and enhancing their properties,” said Dwight Johnston, chief economist for the California Credit Union League.

In the entire San Francisco-Oakland-Hayward metro area, 83 percent of the total 1.03 million mortgages had a minimum 20 percent equity as of June of this year. Home equity loans, or second mortgages specifically, increased 11 percent, to $3.9 billion. This marks a record dollar amount and a whopping 41 percent rise from the 2013 low of $2.7 billion, according to the report.

“As more of these homeowners see the light of day with values rising, we’ll see more of this remodeling trend,” Johnston said. “Pulling out home equity seems to have legs and is here to stay, especially since job growth across California remains strong and is supporting household stability.”

Credit card lending increased 4 percent as well, hitting a record $1.2 billion.

Email Kimberly Manning

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