Local homeowners lean on HELOCs to tap equity; home purchase loan originations decline

Tri-Cities homeowners – especially those in the Kingsport-Bristol Metropolitan Statistical Area (MSA) – leaned on Home Equity Loans during the first quarter to put their equity to work amid increasing home prices and rising rates. At the same time, loans based on short-term rates – like HELOCs – will see rate increases due to the recent 25-point increase in the federal fund rate. The Fed has also signaled that more increases are likely.


ATTOM Data Solution’s Q1 Residential Property Loan Origination Report outlines the increase in HELOCs while local originations for home purchases and refinancing declined.

Kingsport-Bristol was among the 165 MSAs analyzed with the biggest increase in HELOC originations from the previous quarter. With a 112% increase, it was second to Chattanooga, up 165%, in Tennessee. Athens, Ga. led the nation with a 176% increase over the previous quarter.


A year-over-year comparison shows Kingsport-Bristol’s increase at 92%. ATTOM focused on the 50 MSAs with over a million population for this metric so Kingsport-Bristol wasn’t included among the increase leaders. Hartford, Conn. led the nation with an 80% increase. Nashville was up 74% from last year.

HELOC originations in the Johnson City MSA were up 49% from Q4 last year. The year-over-year increase was 14%.


There were 1,087 HELCO originations in the Tri-Cities region, up 92.9% from the previous quarter and 65.5% higher than last year.

ATTOM’s report is derived from publicly recorded mortgages and deeds of trust. Counts and dollar volumes for the two most recent quarters are preliminary since they are projected based on data at the time the report was made.

“Putting home equity to work is the name of the game in the 2018 housing market — both for current homeowners as well as homebuyers,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “With interest rates rising and home price appreciation accelerating, current homeowners are increasingly turning to home equity lines of credit rather than refinances to tap their home’s equity.”


How will the Fed’s recent 25 basis point increase affect those tapping equity with HELOCS?

Holden Lewis, research analyst at NerdWallet, says the recent Fed rate hikes will most likely to bite for those with HELOCs and credit cards. Loans based on short-term rates – that includes HELOCs and ARMs – will be immediate increases in their rates.

Total Tri-Cities loan originations – driven by HELOCs – were up 7% from the previous quarter and 5.7% higher than last year.

In the Johnson City MSA, there were up 8% from Q4 and 10% higher than last year. Kingsport-Bristol lagged the region with a 7% increase from the previous quarter and a 3% increase from last year.

Home loan originations in the seven-county Tri-Cities region were 26.1% lower than Q4 last year and down 7.7% from last year.

Purchase originations in the three-county Johnson City MSA were down 12% from the previous quarter and down 5% from last year.

In the four-county Kingsport-Bristol MSA purchase originations were down 39% from the previous quarter and down 21% from last year.

Refi loan originations were down 1.6% from the previous quarter in the Tri-Cities and down 16.6% from last year.

Johnson City was the local exception in refi originations. They were 24% higher than the previous quarter and up 19% from last year.

In Kingsport-Bristol they were 17% lower than Q4 last year and down 39% from Q1 last year.

ATTOM Data Solutions analyzed recorded mortgage and deed of trust data for single family homes, condos, townhomes and multi-family properties of two to four units for this report. Each recorded mortgage or deed of trust was counted as a separate loan origination. Dollar volume was calculated by multiplying the total number of loan originations by the average loan amount for those loan originations. Origination counts and dollar volumes are projected for the most recent two quarters based on historical share of mortgage and deed of trust data recorded and collected within 45 days from the end of a quarter — which is when ATTOM pulls data for the report.