Home-equity loan installment balances rose 0.3% in August, representing the first increase since November 2007, according to Equifax's National Consumer Credit Trends Report.
This improvement is a sign of a potential mortgage market rebound, the company said.
Previously, a survey from National Mortgage News found residential funders of all different stripes originated $5.59 billion of seconds in 2Q, a 23% improvement from the same period a year earlier.
"The residential real estate market finally seems to be finding solid ground," said Equifax chief economist Amy Crews Cutts. "We're seeing signs that the contraction in mortgage debt is slowing and delinquencies continue to trend down at the same time that mortgage rates set new record lows on almost a weekly basis. The environment has been set for growth for a while—now it looks like it may finally be happening."
But the market fell hard and fast during the nearly five-year-long period. Home equity installment balances declined 49% to $143 billion in August 2012 from their $278 billion peak in September 2007.
While New Mexico leads the pack in both growth in balances and number of loans outstanding in August, three states hit hard by loss of property value during the crisis are on the top of both lists as well. California is second in growth in balances and fourth in growth of number of loans, while Florida was fifth and second, and Nevada third and third, respectively. Colorado was fourth and fifth in the two categories.
There was more good news on the delinquency side. Home equity installment loan write-off rates fell 16% to a rate of just 2.69%, the lowest level since February 2008, Equifax said.