Home equity investments may grow as high mortgage rates persist

Michael Gifford, CEO of Splitero, a home equity investment (HEI) provider, said HEIs could expand their market share as high mortgage rates and stricter borrowing requirements limit homeowners' access to equity through traditional products, according to HousingWire.

Gifford highlighted challenges in the HEI market including low consumer awareness, pricing issues, and regulatory uncertainty. He emphasized the need for clear regulatory guidelines and consumer education to support growth.

He noted that most homeowners are unaware of HEIs, which remain a small segment of the mortgage ecosystem. Splitero aims to educate homeowners about options to access home equity, which represents a large potential market.

Gifford pointed out that many homeowners have over 50% of their home's value in equity and are seeking ways to use it to improve their lives. He believes the current interest rate and economic environment positions HEIs well to meet this demand.

He also mentioned that increased investor participation and securitization activity could help lower costs for borrowers over time, potentially making HEIs more accessible and affordable.