Revolving Debt Climbs as Credit Card Interest Rates Set New Records

2023-01-10T13:21:20-06:00

By David Logan on January 10, 2023 • The balance of consumer credit outstanding grew 7.1% in November 2022 (seasonal adjusted annual rate) after climbing 7.4% (SAAR) in October according to the Federal Reserve’s latest G.19 Consumer Credit report.  Revolving debt—which consists primarily of credit card debt—increased at a 16.9% rate, more than four times the growth of nonrevolving debt (excluding real estate) which grew 3.9% (SAAR). Credit card interest rates climbed 1.97 percentage points—or 197 basis points—to 20.4% between August and November 2022, following a 178 basis point increase between May and August (credit card terms are only released in February, May, August, and November). Prior to August 2022, the largest three-month increase in the series—which dates back to 1994—was a 98 basis point increase in May 1995. Total consumer credit currently stands at $4.76 trillion, an increase of $28 billion over the month and $349 billion, year-over-year. Nonevolving credit outstanding increased $11.5 billion while the level of revolving debt rose $16.5 billion over the month. Revolving and nonrevolving debt accounted for 25.0% and 75.0% of total consumer debt, respectively.  Between November 2021 and November 2022, revolving consumer credit outstanding as a share of the total increased 1.6 percentage points after reaching its most recent low of 22.9% in May 2021. Related ‹ How Many Households Are Priced Out By Higher Mortgage Rates in 2022?Tags: auto loans, consumer credit, credit card debt, credit cards, g.19, household balance sheets, household debt, nonrevolving debt, revolving debt, student loan debt

Revolving Debt Climbs as Credit Card Interest Rates Set New Records2023-01-10T13:21:20-06:00

Households’ Real Estate Asset Growth Continues to Slow in Q3

2022-12-12T08:28:16-06:00

By Jesse Wade on December 12, 2022 • The most recent release of the Z.1 Financial Accounts of the United States shows a sharp slowdown in the quarter-over-quarter growth of households’ real estate assets. After six consecutive quarters of above 3 percent growth quarter-over-quarter, the third quarter of 2022 saw a 1.74% increase in households’ real estate asset value. The level of households’ real estate assets increased by $0.72 trillion from $41.19 trillion in the second quarter of 2022 to $41.91 trillion in the third quarter of 2022. The market value of owner-occupied real estate increased 13.82% on a year-over-year basis from $36.82 trillion in the third quarter of 2021.  The slowdown in growth of real estate assets coincides with the housing market correction as housing prices adjust across the U.S. Real estate secured liabilities of households’ balance sheets, i.e., mortgages, home equity loans, and HELOCs, increased over the third quarter from $12.15 trillion to $12.35 trillion, a 1.73% quarterly increase. Year-over-year, real estate liabilities increased 7.43% from $11.50 trillion in the third quarter of 2021. This was the fourth consecutive year-over-year percentage increase above 7 percent. The year-over-year growth of real estate liabilities has steadily been accelerating over the past 3 years, from 2.59% in the third quarter of 2019 (Pre-Pandemic) to now above 7 percent for the past 4 quarters. Aggregate owners’ equity (i.e., the difference between homeowners’ real estate assets and liabilities) rose from $29.05 trillion to $29.56 trillion, representing 70.52% of all owner-occupied household real estate. Related ‹ Concrete Prices, Volatility Continue Torrid Pace as Lumber NormalizesTags: home equity, homeowner equity, household balance sheets, household debt, market value, mortgage debt, residential real estate

Households’ Real Estate Asset Growth Continues to Slow in Q32022-12-12T08:28:16-06:00

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