Calculated Risk · Housing & Cities
TIER 4 Fri, 20 Mar 2026 14:46:06 +0000
Total Mortgage Equity Withdrawal (MEW) was Slightly Positive in Q4 ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ | | ---|---|--- | | | Forwarded this email? Subscribe here for more --- # The "Home ATM" Mostly Closed in Q4 ### Total Mortgage Equity Withdrawal (MEW) was Slightly Positive in Q4 | | CalculatedRisk by Bill McBride --- | Mar 20| | | ∙| | Preview ---|---|--- | --- --- | | | --- | | --- | | --- | | --- | | READ IN APP --- The Federal Reserve released the Financial Accounts of the United States - Z.1 (sometimes called the Flow of Funds report) for Q4 yesterday. We can use that data to calculated how much equity homeowners withdrew from their homes last quarter. Mortgage Equity Withdrawal is an aggregate number and is a combination of homeowners extracting equity - hence the name "MEW" - and normal principal payments and debt cancellation (modifications, short sales, and foreclosures). ### Quarterly Increase in Mortgage Debt Here is the quarterly increase in mortgage debt from the Federal Reserve's Financial Accounts of the United States - Z.1. In the mid '00s, there was a large increase in mortgage debt associated with the housing bubble. | | ---|---|--- In Q4 2025, mortgage debt increased $99 billion, unchanged from $117 billion in Q3. 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). ### Mortgage Debt as a Percent of GDP The second graph shows household real estate assets and mortgage debt as a percent of GDP. Mortgage debt is up $3.12 trillion from the peak during the housing bubble, but, as a percent of GDP is at 43.8% - down from Q3 - and down from a peak of 73.1% of GDP during the housing bust. **This means most homeowners have large equity cushions in their home**. | | ---|---|--- The value of real estate, as a percent of GDP, decreased in Q4 and is below the recent peak in Q2 2022, but is well above the median of the last 30 years. The third graph shows homeowner percent equity since 1952. | | ---|---|--- Household percent equity (as measured by the Fed) collapsed when house prices fell sharply during the housing bust. In Q4 2025, household percent equity (of household real estate) was at 71.3% - down from 71.6% in Q3, 2025. Note: This includes households with no mortgage debt. ### Calculated Risk Estimate of MEW **The following content is for paid subscribers only. Thanks to all paid subscribers!** CalculatedRisk Newsletter is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber... Upgrade to paid ## Keep reading with a 7-day free trial Subscribe to CalculatedRisk Newsletter to keep reading this post and get 7 days of free access to the full post archives. Start trial ### A subscription gets you: | Subscriber-only posts and full archive ---|--- | Post comments and join the community --- | | | Like --- | | Comment --- | | Restack --- (C) 2026 CalculatedRisk Email: dive_hike@yahoo.com, 548 Market Street PMB 72296 San Francisco, CA 94104 Unsubscribe