HELOC Shock Heat Map

April 8, 2015 | Daren Blomquist, RealtyTrac

A RealtyTrac analysis of open Home Equity Lines of Credit originated during the housing bubble years of 2005 to 2008 shows that there are nearly 3.3 million HELOCs scheduled to reset at fully amortizing monthly mortgage payments between 2015 and 2018 after a 10-year period with interest-only payments. The average increase in monthly payments when these HELOCs reset will range from $138 for those resetting in 2016 to $161 for those resetting in 2018.

More than 1.8 million of the resetting HELOCs (56 percent) are on homes that are seriously underwater, with a combined loan to value ratio of 125 percent or more, and the percentage of underwater homes with resetting HELOCs is much higher in some markets such as Las Vegas (89 percent), Inland California (80 percent or more in many markets), Orlando (79 percent), Reno, Nevada (78 percent), and Phoenix (76 percent).

The heat map below shows markets with the most resetting HELOC shock over the next few years, both by sheer number of HELOCs scheduled to reset (size of the bubble) and by the percentage of resetting HELOCs that are on homes seriously underwater (color of bubble). This heat map displays metropolitan statistical areas with a population of 200,000 or more.


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