During the housing bubble, many homeowners borrowed heavily against the image of their home equity, which they jokingly referred to as their „home ATM.“ This contributed to the subsequent housing collapse. Because when home prices fell, so many homeowners had negative equity in their homes. Note: Very few homeowners currently have negative equity – It's different than during the housing bubble. … This is the quarterly increase in mortgage debt by the Federal Reserve. US Financial Accounts – Z.1 (also known as the Funds Flow Report) was released today. In the mid-2000s, mortgage debt increased significantly due to the housing bubble.
Mortgage debt increased $90 billion in the fourth quarter of 2024, down from $119 billion in the third quarter and down from a cycle peak of $467 billion in the second quarter of 2021. Note that mortgage debt has been declining for about seven years as distressed sales (foreclosures and short sales) have been cleared out. large amount of debt.
However, this is not all just mortgage equity withdrawal (MEW), as some of this debt is used to increase the housing stock (purchase new homes).