Using the house as a piggy bank is back in vogue. American homeowners pulled equity from their homes via cash-out refinances in the third quarter at the highest rate in more than 14 years.
Borrowers tapped $70 billion of home equity in the summer of 2021, mortgage data firm Black Knight says in a report released Monday. That’s the highest quarterly tally since 2007, when the housing bubble was about to burst.
Americans pulled huge amounts of equity from their homes during that boom, leaving them vulnerable to foreclosure when the housing market tanked. But there are many reasons this housing boom is unlike the last one.
More than $70 billion in equity in just three months sounds like a lot. However, Black Knight says that sum equaled just 0.8 percent of available equity entering the quarter.
Compared with the last refi frenzy, today’s cash-out activity is less than a third of the rate at which homeowners were yanking money from their homes back then, Black Knight says.
