Growth of Household Real Estate Market Value Slows in Q2


By David Logan on September 21, 2022 • The latest results from the Federal Reserve’s Z.1 Financial Accounts of the United States, i.e., the Flow of Funds, show that in the second quarter of 2022, growth of the market value of all owner-occupied real estate in the United States slowed after showed the largest year-over-year percentage gain since 2001 the prior quarter. The market value of owner-occupied real estate increased $1.5 trillion to $41.2 trillion in the second quarter of 2022, on a non-seasonally adjusted basis. Household real estate assets’ year-over-year gain in the second quarter was 15.9%, down from 16.2% the prior quarter. Quarter-over-quarter increases slowed from 4.3% to 3.7% in Q2 2022 in line with slowing home price growth. Remodeling also contributed to the slowdown in total market value as a remodeling activity declined both year-over-year as well as quarter-over-quarter. Real-estate secured liabilities of households’ balance sheets, i.e., mortgages, home equity loans, and HELOCs, increased 2.2% over the prior quarter and 8.0%, year-over-year. Similarly, aggregate owners’ equity (i.e., the difference between homeowners’ real estate-secured assets and liabilities) rose from $27.8 trillion to $29.0 trillion, representing 70.4% of all owner-occupied household real estate. Related ‹ Fed Raises by 75 Basis Points, AgainTags: home equity, homeowner equity, household balance sheets, household debt, market value, mortgage debt, residential real estate

Growth of Household Real Estate Market Value Slows in Q22022-09-21T16:22:39-05:00

Revolving Consumer Credit Posts Double-Digit Increase in Q2 2022


By David Logan on August 31, 2022 • Non-real estate consumer credit grew at a seasonal adjusted annual rate (SAAR) of 8.7% in the second quarter of 2022 according to the Federal Reserve’s latest G.19 Consumer Credit report. Revolving debt climbed 14.6% (SAAR), double the increase in nonrevolving debt (+6.9%). Total consumer credit currently stands at $4.6 trillion, with $1.1 trillion in revolving debt and $3.5 trillion in non-revolving debt. From the previous quarter, total consumer credit increased by $98.9 billion, with revolving debt and non-revolving debt increasing by $40.3 billion and $59.3 billion, respectively. Part of the recent growth in consumer credit—both revolving as well as nonrevolving—is explained by persistently high inflation. The increase in nonrevolving credit owes mostly to higher car prices. Since January 2021, new and used car prices have increased nearly 15% (year-over-year) each month, on average, while sales volume declined. Revolving credit balances can be similarly explained by rising price levels as the 12-month increases for energy and food items averaged 32% and 9% over the first two quarters of 2022. With every quarterly G.19 report, the Federal Reserve releases a memo item covering student and motor vehicle loans’ outstanding levels on a non-seasonally adjusted basis. The most recent memo item indicates that, as of the second quarter of 2022, student loans stood at $1.8 trillion and motor vehicle loans stood at $1.4 trillion. Annualized, the changes in these two categories from the previous quarter are $3.2 billion and $129.1 billion, respectively. Together, these loans made up 88.9% of nonrevolving credit balances (NSA) in the second quarter. Although this share is near the ten-year average (91.4%), it is the smallest since 2011. Related ‹ Home Price Growth Eased in JunePrivate Residential Spending Slides in July ›Tags: auto loans, consumer credit, consumer debt, energy, energy prices, household debt, inflation, non-revolving debt, revolving debt, student loan debt

Revolving Consumer Credit Posts Double-Digit Increase in Q2 20222022-09-01T17:21:55-05:00

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