During the boom, homes in the U.S. were functioning like veritable ATMs. Lately, they are acting more like vacuums.

At the peak of the housing bubble in 2006, refinancing allowed U.S. homeowners to cash out $80 billion or so from their homes each quarter thanks to surging home prices and lax lending standards. Such "cash-outs" accounted for nearly 90% of refinancing activity at the time, according to Freddie Mac, helping fuel consumer spending and broader economic growth.

How times have changed. On Wednesday, the Mortgage Bankers Association will release its weekly tally of purchase and refinance applications. While purchase activity is still mired at roughly a third of peak levels, refinance applications have doubled thanks to the drop in mortgage rates over the past year. Yet that is hardly goosing U.S. economic activity.

For one, applications themselves are no guarantee the refinancing will actually get approved. That is especially true now that lenders have tightened standards, the recession has wiped out the credit quality of many Americans, and home prices are at risk of falling anew.

The broader problem, however, is that refinancing has switched from being "cash-out" to "cash-in."

In the third quarter, for example, the total amount of cash extracted from U.S. home equity dwindled to just $7.4 billion—less than a tenth of peak levels. As a share of total refinancing activity, meanwhile, cash-outs represented just 18%—the lowest since Freddie's records began in 1985.

By contrast, the percentage of "cash-in" refinancings, or those used to lower mortgage balances, leapt to 33%. While that helps homeowners in the long run, by lowering monthly payments, it hardly provides an immediate lift to spending. Moreover, hefty upfront charges and tighter standards are keeping people who might benefit most—those stuck with high interest rates or negative equity—from taking advantage.

As New York University economics professor Andrew Caplin, pointed out in a paper he co-wrote in 1993, refinancing constraints in a bust exacerbate regional recessions. That isn't great for the outlook in states such as Florida and Nevada hardest hit by the housing collapse.

Ross Perot once described Mexico as a "giant sucking sound" on the U.S. economy. Today, that sums up the U.S. housing market.