You may remember the term “Home ATM” from the mid 2000’s. This term stemmed from the abundance of homeowners who pulled significant amounts of equity from their homes in the form of Home Equity Loans and Lines of Credit. Home values dropping in 2008, 2009 and 2010 caused many homeowners to be ‘underwater’ meaning that, all at once, their home was worth less than they owed.

Today, there are two big differences compared to the Home ATM years.

First, homeowners today have a lot of equity and very few homeowners are underwater. Of all the properties in the U.S. with mortgages, only 2.1% have negative equity. At the end of 2009, 24% of properties were underwater.

Second, homeowners are not pulling cash out of their homes like they were in the mid 2000’s. Net Equity Extraction is only 1.6% of disposable income compared to 8% during the housing bubble years.

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