Home equity installment balances rose 0.3 percent in August—the first monthly increase since November 2007, according to Equifax. The company says its findings signal “a possible turning point in mortgage demand.”

This newly developed trend in home equity credit is highlighted in Equifax’s newest National Consumer Credit Trends Report and bears noting after the home equity credit market plummeted along with property values during the housing downturn.

The total number of home equity installment loans fell 43 percent in a span of four years—-from 7.7 million in August 2007 to 4.4 million in August 2012, Equifax reports.

Home equity installment balances contracted even further, declining 49 percent from their $278 billion peak in September 2007 to just $143 billion in August 2012.

But according to Amy Crews Cutts, Equifax’s chief economist, recent trends seem to indicate the residential real estate market has finally found solid ground.

“We’re seeing signs that the contraction in mortgage debt is slowing and delinquencies continue to trend down at the same time that mortgage rates set new record lows on almost a weekly basis,” Crews Cutts explained. “The environment has been set for growth for a while—-now it looks like it may finally be happening.”

While delinquency rates on home equity accounts have been stable in a narrow band in recent months, Equifax says write-off rates accelerated their declines in August. Home equity installment loans were written off at a rate of just 2.69 percent during the month, down 16 percent from July’s write-off rate and the lowest level Equifax has recorded since February 2008.

Looking at home equity credit developments at a more granular level, New Mexico led August’s growth with both the largest monthly gain in loan balances (+2.3 percent) and in the number of loans outstanding (+1.7 percent).

Rounding out the top five states with the greatest percentage growth in loan balances were California (+2.3 percent), Nevada (+2.1 percent), Colorado (+2.0 percent), and Florida (+1.9 percent).

The same states topped the charts for percentage growth in number of loans, but in different positions. Coming in behind New Mexico and the No. 1 spot was Florida (+1.6 percent), Nevada (+1.5 percent), California (+1.35 percent), and then Colorado (+1.3 percent).