American homeowners are finally digging out of the hole created by the housing crisis says the Wall Street Journal, but their housing wealth is playing a much smaller role in the overall economy than it did before the downturn.
Home equity has roughly doubled to $12.1 trillion since house prices hit bottom in 2011, according to the Federal Reserve. As a result, a key gauge of housing wealth—homeowners’ equity as a share of real-estate values—is nearing the point seen a decade ago, before the downturn.
That would have resulted in a double-barreled boost to the economy by providing owners with more money to tap and making them feel more flush and likely to spend. But today, that new-found wealth has had little effect on behavior. There seems to be a reluctance to take out home equity loans. Lines of credit and cash-out refinances are higher than last year, but are still depressed, according to bankers. Steve and Sinclair review the trends in multiple areas.
In the Q & A Segment, CFP®, CIMA® Murray Titterington with IQ Wealth brings up to date on final changes in Social Security and tax saving opportunities that have been extended for 2015 and 2016.