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The Boston Globe

Business

Wealth effect fades as mortgage debt falls to five-year low

US mortgage debt, a driver of consumer spending during the real estate boom, dropped to the lowest level in almost five years in the third quarter as foreclosures wiped out home loans and housing purchases fell.

The volume of outstanding home mortgages declined to $9.88 trillion from $9.94 trillion at June 30, according to Federal Reserve data. The reading was the lowest since the end of 2006. Mortgage volume peaked at $10.6 trillion in early 2008, the final months of a decadelong borrowing binge.

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