Low mortgage rates doubtless motivated much of this spending, but the ready availability of home equity for extraction appears to have also played a substantial and independent role in prompting additional household expenditures. Even as recently as the late 1980s, a family that wanted to use housing wealth to finance consumption would have faced an expensive and time-consuming process.
Although substantial home equity wealth has existed for many years, only in the last decade or so has secured borrowing against home equity become a cost-effective source of credit in a wide variety of circumstances.