Home Equity Mortgage Market May Benefit from Signs of Hope in Detroit

By Richard Barrington
Local Lender Columnist
Jul 13, 2007
Good news in connection with the Detroit real estate market may seem scarce, but there are signs that times may be changing. Home equity mortgage shoppers may want to take a fresh look at how much equity they have to work with.

Assumptions about how much home equity may be available to you naturally depend upon the value of your home. Given the weak real estate market of the past year or so, you may have overly-discounted this value--or simply been afraid to check. At last though, there may be reasons to take a second look.

Positive Signals Can Help Firm Up the Real Estate Market

With Detroit as a whole losing population at a rate of 10,000 people per year, supply-and-demand has certainly not favored real estate values. However, there are some signs of hope for the downtown area:

• An active market for new $1,000,000 condominiums downtown
• Recent findings that the average income of downtown Detroit residents is 33% higher than previously thought
• An influx of 4,000 new residents into the downtown area between 2000 and 2005

Monitor Home Equity As You Would Any Asset

The point is, if you think you might have use for a home equity mortgage don't be too quick to dismiss the value of your home. Real estate values are not only subject to change, they are often very property-specific.

Even outside of getting a second mortgage, it is important to remember that your home is an asset. Just as you wouldn't have an investment account without periodically checking the value of those investments, so it also makes sense to keep an eye on the value of your home from time to time. Whether you choose to mortgage your home equity will depend on your needs, but it always helps to know what your options are.

About the Author
Richard Barrington is a freelance writer and novelist who previously spent over twenty years as an investment industry executive.