We’ve got $9 trillion in outstanding residential mortgage debt, and $1 trillion of that amount resetting next year.

A lot of people have refinanced out their equity. The 70% figure includes refinancing. We’ve been on a refinancing spree in this country, and we’ve “liberated” $700 billion of debt from our homes in the last few years. Homeowners consolidate their auto, credit card, and HELOC debt by refinancing, and many long-time homeowners are now facing foreclosure.

The baby boomer retirement wave will be accompanied by downsizing, so I expect to see a demographic shift into smaller homes. Unfortunately, many will be disappointed that they have less equity than they thought, making for a less pleasant retirement.