North Olmsted, OH, Feb. 19, 2025 – Corporate Settlement Solutions (CSS), a full-suite provider of real estate settlement solutions, today released results from its full-year 2024 Home Equity Valuation Analysis which shows a continued increase in the use of Automated Valuation Models (AVMs) among lenders originating home equity loans.
The CSS Home Equity Valuation Analysis reviews the valuation products that CSS lenders used for home equity originations, specifically: Automated Valuation Model/Property Condition Reports; Appraiser-Valued Hybrids; Full Appraisals; Non-Appraiser-Valued Hybrids; and Drive-by Appraisals.
According to the report, in 2024 CSS clients used Automated Valuation Model/Property Condition Reports on 34% of their home equity loans compared to 2023 when AVMs were used on 25% of loans. AVMs were the only product category among the five that had an increase on a year-over-year basis. Appraiser-Valued Hybrids were the second most-frequently selected valuation model in 2024 at 25% (down from 29%), followed by Full Appraisals at 18% (down from 19%), Drive-by Appraisals at 12% (no change) and Non-Appraiser-Valued Hybrids at 11% (down from 15%).
As the real estate market continues to face headwinds for purchase originations, home equity lending is an opportunity many lenders are leveraging. Because home equity lending is typically a no- or low-cost offering by most lenders, AVMs have grown in popularity since they deliver valuations quickly and inexpensively. Homeowners across the U.S. have an average of more than $320,000 in equity, and, all told, about 90% of homeowners have some level of “tappable” equity available for withdrawal. Moreover, homeowners with historically low first mortgage rates often opt for home equity products for renovations and debt consolidations rather than refinance their mortgage.
“Given continued tight mortgage market conditions, home equity lending is a bright spot for many lenders with expectations that it will only increase over the next several years,” said Ashley Jelinek, CEO of Corporate Settlement Solutions. “The key to profitable home equity lending though is efficient, accurate and cost-effective valuation of properties. Our analysis shows that lenders continue to see and take advantage of the value—both from a cost and timing perspective—of using AVMs.”
About Corporate Settlement Solutions
Corporate Settlement Solutions (CSS) provides title, valuation and closing solutions for commercial and residential real estate transactions. The company’s real estate settlement solutions combine the personal touch and responsiveness of local providers with the geographic scale and technological superiority of large national providers. Its mission is to foster long-term partnerships that enable customer growth. Learn more at www.visitCSS.com