Rise in cash-out volume not a risk to the recovery

With fewer spending options during the lockdown, the share of cash-out refinances is much lower than usual given the recent surge in house prices. And, while the volume of cash extracted has reached a 13-year high, most borrowers look to be spending that on home improvements, which preserve home equity, or paying down other debt. The rise in cash-out volume therefore does not pose a threat to the recovery.