Americans are pulling the most money out of their homes through cash-out refinancing since the year just before the financial crisis of 2008.
Many have used the money to pay off credit card debt, while others sought to upgrade their homes with fresh decor or DIY home projects.
In 2020, U.S. homeowners pulled $152.7 billion from their home equity — a 42% increase from the previous year and the most since 2007, according to a new report from Freddie Mac.
Mortgage originations grew as well, with the most-ever recorded according to data from Black Knight Inc. Almost $3 trillion of those mortgages is attributable to refis, as people sought to take advantage of low mortgage rates.
Home prices rose nearly 19% in 2020 from 2019, with the average home price at roughly $310,000 in December 2020.
The housing market is sensitive to mortgage rates. Investors do not anticipated them remaining low given the $1.9 trillion in stimulus and the economy opening back up. The expectation is that rates should move higher in the coming year.