by Calculated Risk on 6/12/2025 12:59:00 PM
Today, in the Calculated Risk Real Estate Newsletter: The “Home ATM” Mostly Closed in Q1
A brief excerpt:
During the housing bubble, many homeowners borrowed heavily against their perceived home equity – jokingly calling it the “Home ATM” – and this contributed to the subsequent housing bust, since so many homeowners had negative equity in their homes when house prices declined.
…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 Q1 2025, mortgage debt increased $45 billion, down from $112 billion in Q4. 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).
