Five years of cash-out refinancing, loans, and lines of credit have succeeded in reducing Americans' percentage of equity in their homes to below 50 percent for the first time since 1945, the Federal Reserve said today.

Equity levels - the percentage of the home owned by the family rather than the mortgage company - fell to 47.9 percent in the fourth quarter of 2007, from 48.9 percent in the third quarter and 50.5 percent in the fourth quarter of 2006, the Fed reported.

As home prices climbed by double digits to record levels in the early part of this decade, millions of homeowners refinanced to wring out as much cash as possible. That gave them money, but less of a share of the equity in their homes.

"It highlights the severe financial stress that millions of homeowners are under," said Mark Zandi, chief economist at Moody's Economy. com in West Chester. "It is the principal reason for the record foreclosures, the turmoil in global financial markets, and the contracting economy."

Joel F. Naroff, chief economist at Commerce Bancorp Inc., of Cherry Hill, added: "Homeowners cannot simply use their homes as ATMs anymore, and that is adding to the woes of the economy."

Equity levels have declined slowly but steadily since 1945, the Fed reported.

But in the last year, as home values plummeted in many areas, especially California, Florida, Nevada, Arizona and the Rust Belt states of the Midwest, homeowners are being squeezed financially into foreclosures.

The Mortgage Bankers Association of America reported today that the rate of mortgage delinquencies rose in every state but Alaska in the fourth quarter of 2007 from the third quarter. The highest percentages were in the same states ex-periencing declining home values.

Nationally, all mortgages going into foreclosure rose to 0.83 percent. The percentage of adjustable-rate mortgages to riskier borrowers entering foreclosure rose to 5.29 percent. This happened when the initial, or teaser, rates were adjusted upward.

But that is becoming less of an issue because the index on which adjustments are based has declined since September, said Douglas Duncan, the association's chief economist.

"The rate reset issue on adjustable-rate mortgages is becoming less of an issue," he said.

Fixed-rate, 30-year mortgages fell to 6.03 percent today from 6.24 percent the previous week, thanks to perceived weakness in the economy driving bond yields down, said Freddie Mac chief economist Frank Nothaft.

Meanwhile, existing-home sales appear to be stabilizing, the National Association of Realtors said today, with its January index of pending-home sales unchanged from December.

The index was down 19.6 percent from January 2007, but chief economist Lawrence Yun said an improving mortgage climate, with increases in FHA loan limits (to $420,000 in metropolitan Philadelphia), means "a notable rise in home sales can be anticipated in the second half of the year."

Contact real estate writer Alan J. Heavens at 215-854-2472 or