An Aggregate Investigation of the Demand for Home Equity Credit‪.‬

INTRODUCTION According to the Federal Reserve Board's 2001 Survey of Consumer Finances, 67.7 percent of U.S. households were homeowners and 44.6 percent of households had some type of home-secured debt, including first and second mortgages and home equity loans and lines of credit secured by the primary residence (Aizocorbe, Kennickell, and Moore, 2003). More importantly, the 2001 survey indicates that 32.1 percent of households with home-secured debt used the borrowed money for a purpose other than financing their home (Aizocorbe, Kennickell, and Moore, 2003). Collectively, these figures demonstrate the overall importance of home equity as a means by which homeowners can alter present and future consumption, repay other debts, or both.