Home Equity is about to be the hottest arbitrage in a cold mortgage market

Looking for bright spots in the market

Bill Rice
February 17, 2023

Figure out how to get positioned for the pending 23% credit card debt to 7.8% HELOC debt swap arbitrage.

The charts make this pending hot spot in the fridge mortgage market obvious.

Americans are sitting on $925 billion of credit card debt, financed at an average of 23.55%, with $121 billion added since the third quarter of 2021.

Meanwhile, household home equity has climbed to over $29.5 trillion.

This becomes a no-brainer swap — 23% for 7.8%.

Source: Bankrate.com

This might also bring back the piggyback as lenders look for ways to shave dollars off timid homebuyers’ monthly payments.

Other warm spots in the market…

Rentals.

Financing cash-flowing real estate — DSCR loans.

Here are a few articles to add to your read-later stack:

January Housing Starts: Near Record Number of Housing Units Under Construction

Housing Starts Decreased to 1.309 million Annual Rate in January

calculatedrisk.substack.com/p/january-housing-starts-near-record

Short-term Vacation Rental Market Size, Share Report, 2030

The global short-term vacation rental market size was valued at USD 99.38 billion in 2021 and is expected to grow at a compound annual growth rate (CAGR) of 11.1% from 2022 to 2030. The growth is driven by the high demand for staycations, rising expenditure on travel and tourism, and travelers’ inclination toward budget-friendly accommodations

www.grandviewresearch.com/industry-analysis/short-term-vacation-rental-market-report

What are you thinking about in this market?

— Bill