Home equity withdrawal slows…ATMs drying up

Home equity withdrawal (or mortgage equity withdrawal – MEW, in industry parlance) declined for the first time since 1999 representing a shift in how American consumers use their home’s equity, according to the Wall Street Journal (subscription). 

As Calculated Risk points out MEW has been a huge part of consumer spending over the past several years.  People have basically been using their homes as ATM machines.  Consumer spending has been attributed to keeping the economy moving during slow parts of the last few years.  MEWs make up a significant percentage of the country’s GDP.

Calculated Risk Graph

This slow down in equity withdrawal will have a material impact on the nation’s economy.

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