Salient to Investors:
Home equity in the first quarter rose to the highest level since 2008 as homeowners refinance to pay down principal. Half the mortgages refinanced in the fourth quarter reduced loan size, a record.Predictions:
About 23 percent of mortgage holders are underwater on their loans.
Median forecast of economists surveyed by Bloomberg expects the economy will grow at a 2.2 percent rate in 2012 and 2.4 percent in 2013 – versus 3.9 percent average increase in the third-year periods following the 1982, 1994, and 2001 recessions.
Reducing mortgage debt is bad for economic growth short-term but good for the long-term.