On Nov 7, 2007, at 1:35 AM, Jordan Hayes wrote:
> Doug writes:
>
>> Fed economist James Kennedy has been updating estimates of
>> mortgage equity withdrawal (MEW) ...
>
> Do you know where they get these numbers from? Because I've noticed
> that on my credit report my HELC provider shows the full possible
> amount
> as being owed (which technically, I guess that's true) despite
> having a
> $0 balance ... so I'm guessing that kind of number is an overestimate.
The raw material is the flow of funds accounts plus the national income accounts. The starting point is new mortgage debt less residential investment. An undrawn line of credit wouldn't count. The Fed has done surveys on what people do with the proceeds of MEW - the division between ordinary consumption, home improvement, paydown of other debt, and asset purchases - and they apply that info to their estimates of new withdrawals. Freddie Mac also has data on mortgage cashouts.
Doug