Friday, January 9, 2026 at 07:15 PM
Original source
Calculated Risk
MacroLab briefing generated by AI for informational purposes. Original reporting by Calculated Risk. Not financial advice.
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In the third quarter of 2024 (July through September), American homeowners cashed out far less money from their homes than they had been doing. When you own a home that has gone up in value, you can borrow against that increased value through a loan, pulling out cash while keeping your home. This practice became so common during the 2000s housing boom that people called it the "Home ATM." The data shows homeowners basically stopped doing this in mid-2024, withdrawing significantly less equity than in previous months and years.
When homeowners pull cash out of their homes, they typically spend it on things like cars, vacations, home improvements, or paying off debts. That spending pumps money through the economy, supporting retail stores, contractors, and other businesses that hire workers. When this source of cash dries up, people have less money to spend, which can slow economic growth and potentially lead to fewer jobs. It also signals that homeowners may be getting nervous about their financial situation or worried that their home values might not keep rising, which could affect confidence in the overall economy and the housing market itself.
Watch whether this trend continues or bounces back in coming quarters. If homeowners keep pulling almost no cash from their homes for many months, it suggests they're getting cautious about money and the economy could be weakening. On the flip side, if cash-outs surge again, it means homeowners are feeling confident and spending is likely to pick up. Also pay attention to home prices and mortgage rates, since those affect how much equity people have available to borrow against and whether borrowing feels affordable to them.