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Consumers Resist Tapping Home Equity as Prices Rise

Since the financial crisis, outstanding mortgage debt has not recovered at the same pace as home prices.

Bob Johnson: This week's chart focuses on the residential mortgage market. Since 2000, the mortgage market has more than doubled from $4 trillion to more than $9.5 trillion in 2008, moving in line with more transactions and as the prices of houses moved up. Then in 2008, when we hit the housing slump, residential mortgages declined by $1.5 trillion to about $8 trillion and really haven't come back despite--as you can see in the graph--the fact that prices have.

So, what's happened there? Let's take a look at the second chart. First, let's look at the top green line--that's what everybody thinks about when they think about mortgages. It's the new mortgages that you take out when you buy a home. Again, you can see the same trend there--the big runup to 2008 and the falloff--but still the number continued to go up. We were adding mortgages every year. But there are some other categories we'll talk about later that took the number down.