Lately, due to decreasing home value and more strict lending standards, many homeowners have cashed out or removed money from their homes, reaching an all time 4 year low. Economists closely watch when home owners begin to cut into their home equity, as this figure affects consumer spending which in turn affects investment. Almost 2/3´s of our economic activity comes from consumer spending. Right now this figure is not doing well, as the market is struggling, and the prices of everyday necessities such as gas and food are rising. This hurts consumers as they in turn try to spend less on other items considered to not be necessities, which in turns makes investors want to invest less and they are afraid to gain little or a negative return.

In the lowest amount since the first half of 2004, for the first part of 2008, over $68 billion in home equity was cashed out based on information compiled from Freddie Mac. Amy Crew, Freddie Mac´s deputy chief economist remarked that $38 billion of this figure, was equity cashed out from the refinancing of loans with prime borrowers; this was less then half of the $79 billion done during the same time frame last year. In this 2^nd quarter, 66% of those who refinanced with Freddie, cashed out near to 5% of their equity.