Posts Tagged ‘economy statistics’

Highest Consumer Delinquency Rate Since 1992

April 3, 2008

A quarterly study by the American Bankers Association found that Americans are falling further behind on consumer loans.

… the percentage of loans at least 30 days past due rose to 2.65 percent in the fourth quarter from 2.44 percent in the third quarter, and from 2.23 percent a year earlier.

Anyone who thinks about the housing crunch shouldn’t be surprised by this type of statistic. It’s not like you’re going to pay your car loan first and then short your mortgage! Many Americans are on ARMs that are adjusting or simply took on too much home during the housing frenzy. Now, they’re struggling to keep their houses, leaving them with less money for other loans. I’m guessing this is going to get worse before it gets better.

The Mortgage Monster

But take this one step farther and I think it becomes a bit scarier. If Americans are putting more of their income towards a home, and they’re still trying to keep up on other consumer loans (but faltering), how much is left for consumer spending which accounts for 2/3 of our GDP?

I know I sound a bit like chicken little but … higher ratio of income going to housing, increasing consumer debt, inflation and a soft job market. This isn’t a rousing mix of ingredients in my opinion. What say you?