After the refinancing boom: will consumers scale back their spending?

Al-Haschimi, Alexander; McConnell, Margaret M.; Peach, Richard

Journal Article

After the refinancing boom: will consumers scale back their spending?

Abstract: Concerns are rising that the recent surge in home equity withdrawal has left consumers in a weakened financial position that will, over time, prompt a retrenchment in spending. However, a look at household assets and liabilities suggests that consumers have used the withdrawn funds to restructure their balance sheets and reduce their debt service burden. As a result, households may be in a better position to spend in the years ahead.

Keywords: Consumer behavior; Consumer credit; Home equity loans;