Its four days until Halloween and there are artificial Christmas trees and decorations in the Home Depot time continuum. So much for the space. Something is not right, where it gets so warped that there’s no returning from a black hole. But things are pretty. What happened to Thanksgiving? Halloween, then Thanksgiving and then Christmas, it is a logical progression we have all known.
If you want to talk about warping time and space, the home equity loan or line of credit is back into the mortgage market place. Some industry experts are predicting as many as 10 million new home equity loans or lines will be taken in the next two years. That is twice as many as were taken in the last five years.
Why this shift in the mortgage universe? The recent home buyer market demand fueled a significant increase in home values providing millions of homeowners with the equity they can now borrow against. That provides an opportunity to take that equity and do some home improvements or pay down some higher interest debt. Both sound financial decisions.
So what does that mean?
People renovating or adding on tend to stay put in their current homes. We have already seen a settling trend for a variety of other reasons. These happy current homeowners are not likely to list homes that are much needed to end the current inventory crunch. It could mean the inventory black hole continues into the foreseeable future. Or even worse, there is an area inside a black hole called the “Singularity” – the point where the universe, in both space and time, is “infinitely” curved. Maybe the housing market has reached that point and it is time to explore this strange new world for opportunities.