A giant housing-debt hangover has been one of the main culprits behind the U.S. economy's lackluster recovery from the 2008 recession. In one encouraging sign, new data from the Federal Reserve suggest that American homeowners might finally be getting out from under it.
The housing bust left U.S. homeowners in a dire state: The value of their properties plummeted, while the mortgage debt they owed didn’t. By early 2009, the difference between the two -- their equity -- had fallen to an all-time low of $6.2 trillion, or just 37 percent of home values, according to U.S. financial accounts published by the Fed. Worse, more than one in four were "underwater," meaning they owed more than their homes were worth.