Mortgage equity drawdown remains strong in the second quarter; Homeowners now rely on real estate equity lines to extract equity

by Calculated risk on 9/12/2022 12:26:00 PM

Today, in the Real Estate Newsletter: Mortgage Equity Pull Back Still Strong in Q2

Excerpts:

Here is the quarterly increase in mortgage debt from the US Federal Reserve’s Z.1 (sometimes called Money Flow Report) financial accounts released on Friday. In the mid-2000s, there was a significant increase in mortgage debt associated with the housing bubble.

In the second quarter of 2022, mortgage debt increased by $263 billion, the most since 2006. Note nearly 7 years of lower mortgage debt as distressed sales (foreclosures and short sales) wiped out a significant amount of Debts.

However, some of this debt is used to increase home equity (purchasing new homes), so that’s not all about taking out mortgage equity (MEW).

There is a lot in the article. You can sign up at https://calculatedrisk.substack.com/ (all ads are free, and most content is free).

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