Click image to enlargeTW: This chart shows the amount of net equity Americans were removing from their homes by quarter through last year. Net equity being home equity loans less principal payments. So if one was paying down a mortgage that value would have been subtracted from those borrowing against the value of their home. As one can see starting in early 2001 and continuing through all of 2007 Americans were pulling anywhere from $60 to $140 billion dollars quarterly out of their homes (again net of any principal payments!). In 2006 alone Americans pulled almost $500 billion of equity out of their homes.
Just one example of how empty our economic expansion such as it was during the 2001-2007 was. Our economy during this decade was built on a house of cards. Obviously this little game is over, the chart turned slightly negative in Q3 2008, updates will show homeowners finally paying down their principal.
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