Housing Wealth Plays a Much Smaller Role in Overall Economy

Home equity roughly doubled to $12.1 trillion since 2011’s rock bottom record, says the Federal Reserve. Despite this, housing wealth is playing a much smaller role in overall economy compared to Pre-Recession times.

Realtor.com cites a study by Moody’s Analytics, which says “home equity’s effect on consumer spending is at its lowest ebb since the early 1990s.”

Reasons for housing wealth’s smaller impact on the economy includes the fact that many owners don’t realize they have equity to tap. On top of that, economists speculate that consumers are more conservative financially.

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