"Home ATM" is Closing; Mortgage Equity Withdrawal (MEW) Declines in Q4

 Today, in the Real Estate Newsletter: "Home ATM" is Closing

Excerpt:

Here is the quarterly increase in mortgage debt from the Federal Reserve’s Financial Accounts of the United States - Z.1 (sometimes called the Flow of Funds report) released today. In the mid ‘00s, there was a large increase in mortgage debt associated with the housing bubble.

In Q4 2022, mortgage debt increased $155 billion, down from $210 billion in Q3, and down from the cycle peak of $258 billion in Q2 2022. Note the almost 7 years of declining mortgage debt as distressed sales (foreclosures and short sales) wiped out a significant amount of debt.

However, some of this debt is being used to increase the housing stock (purchase new homes), so this isn’t all Mortgage Equity Withdrawal (MEW).
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The bottom line is, the “Home ATM” is now closing with refinance activity off sharply and HELOC borrowing declining.

https://www.calculatedriskblog.com/2023/03/home-atm-is-closing-mortgage-equity.html