The millions of homeowners taking cash-out refinancings have led to a decline in home-equity lending, said Eric Belsky, executive director of the Joint Center for Housing Studies at Harvard University.

While the numbers are not out yet, he said that estimates from the Federal Reserve will reflect this trend. He added that when 6.5 million borrowers take the cash-out refinancings to borrow against their home-equity, this phenomenon is bound to have some effect.

The median amount of cash taken out equals 11% of the home's value, according to a study the joint center released last week.

Still, according to the study, second mortgages and home-equity lines of credit surged 45% between 1993 and 1997.

Both the boom in cash-out refinancing and the surge in home-equity lending benefit from home-price appreciation, which rose 4% a year on average since 1993, according to the study.

Housing-price appreciation and a strong housing market are expected to continue, the study says. As the baby-boomers reach their 40s, 50s and 60s, "they will continue to drive homeownership rates and home values to new heights," according to the study. It says that the overall aging of the population "favors rising homeownership rates, strong home-building and remodeling activity and record home sales well into the next decade."

Five states accounted for a third of the record 1998 production: California, Florida, Georgia, North Carolina and Arizona.

Nevertheless, the sunny picture for housing is clouded in some areas. As home values rise, those with low incomes are increasingly unable to afford housing, the study says. This inequity accentuates the need for low-income housing, and the need for affordable multifamily housing, according to experts at a Washington conference last week where the housing-center report was released. - ES

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