Talking Points …
- Homeowners largely have not extracted any recovered equity in their homes, according to a survey by Freddie Mac. Borrowers with conventional loans pulled just $6.5 billion out of their homes during the first quarter through cash-out refinancing, down from $6.7 billion during the prior quarter.
- Cash-out refinancing has been lower only in three quarters since mid-2000, and when adjusted for inflation, cash-out refinancing since 2010 has been near its lowest levels since 1997.
- Cash-out refinancing surged during the housing bubble, reaching a high of $84 billion during the second quarter of 2006. But many borrowers ended up in a position where they owed more than their homes were worth, resulting in a painful pay-back that continues today.