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The Federal Reserve Bank of New York’s Center for Microeconomic Data today issued its Quarterly Report on Household Debt and Credit. The report shows total household debt increased by $184 billion (1.1%) in the first quarter of 2024, to $17.69 trillion. The report is based on data from the New York Fed’s nationally representative Consumer Credit Panel. Aggregate delinquency rates increased in Q1 2024, with 3.2% of outstanding debt in some stage of delinquency at the end of March. Delinquency transition rates increased for all debt types. Annualized, approximately 8.9% of credit card balances and 7.9% of auto loans transitioned into delinquency. Delinquency transition rates for mortgages increased by 0.3 percentage points yet remain low by historic standards. https://lnkd.in/dTSJx-k3

The comparison between credit card debt and mortgage interest rates highlights a major aspect of consumer finance. With credit card debt carrying significantly higher interest rates compared to mortgages, individuals are facing a challenging economic environment. This discrepancy emphasizes the importance of strategic financial planning, particularly in focusing on debt repayment to avoid the compounding effect of high credit card interest. Consumers are encouraged to explore debt consolidation options or seek lower interest credit cards to manage payments more effectively. Additionally, refinancing mortgages at lower rates can free up funds to pay down high-interest debts. Understanding the impact of interest rates on different types of debt is key to making informed financial decisions. #CreditCardDebt #MortgageRates #FinancialPlanning

According to this research firm MarketWatch Guides, a substantial percentage of seniors are still repaying loans even after retirement. With adults aged 65-74 carrying an average debt of $134,950 and those 75+ carrying $94,620, alongside unpaid medical bills, these findings highlight the importance of providing tailored financial solutions to senior clients. Read the article for more details or email reverse@plazahomemortgage.com to explore how a reverse mortgage may be a valuable tool to help senior clients manage debt effectively.

“Factors such as substantial house price increases, larger loan amounts, a higher proportion of variable-rate mortgages, and the elevated cost of living have contributed to the delinquency rise,” said Oakes. “Additionally, payment shocks for newly renewed mortgages and upcoming renewals are poised to impact consumer finances, particularly for those facing mortgage terms that extend beyond their expected retirement age, leaving them with limited options for reducing monthly payment costs.” #consumerinsights #consumerspending #deliquencies #autoloan #creditcards #unsecuredloans #mortgageplanning

https://lnkd.in/eCBm3hCT According to the New York Fed’s Quarterly Report on Household Debt and Credit, total household debt in the United States grew by $228 billion in the third quarter of 2023, to reach an all-time high of $17.3 trillion, at least in nominal terms. The increase was mainly driven by mortgage, credit card and student loan balances, which increased $126, $48 and $30 billion, respectively, with credit card debt growing the fastest in relative terms at nearly 5 percent compared to the previous quarter and 16.6 percent year-over-year.

A month after the Reserve Bank announced the introduction of long-expected debt-to-income ratios (DTIs), the changes are taking effect. From July 1, retail bank mortgage lending will be capped at six times household income for owner-occupiers and seven times income for investors. Here’s how the changes might affect where you’re able to buy property 👉https://hubs.la/Q02G86rL0

This is a clear example of where some of our society will have no choice but to turn to a refinance and tap some of their property appreciation in the coming months to stave off the impacts of inflation and the impact on their household budgets. Small population states like Maryland saw a mind blowing $887 MM increase in credit card debt from end of Q1 to end of Q2 and it only seems logical that this trend will continue going forward. #debtconsolidation #refinancemortgage #financialguidance

Summary: The New York Federal Reserve has reported a concerning trend of younger Americans falling behind on credit card and auto loan payments, with delinquencies surpassing pre-pandemic levels. Total consumer debt has surged to $17.5 trillion in Q4, with serious defaults on debt particularly prevalent among young borrowers and low-income households. Takeaway: The rise in delinquencies, especially among younger borrowers, is a cause for concern and indicates increased financial stress for these groups. Climbing interest rates have strained affordability for loan products, and the impacts of inflation are being felt by young adults and lower-income borrowers. Hashtags: #CreditCardDelinquencies #AutoLoanDelinquencies #FinancialStress #ConsumerDebt #NYFed #InterestRates #InflationEffects #YoungBorrowers #DelinquencyTrends

There's an interesting trend going on right now. As expected, borrowing against real-estate collateral is down. However, utilization of unsecured debt is up. This is largely due to prohibitive mortgage interest rates, and an economy that is squeezing consumers via inflation and high cost of living. The bottom line is that people need to survive and get by day to day. And access to credit provides a lifeline to make it through tougher times. It's a really difficult choice and I feel for American consumers struggling to make ends meet. This trend doesn't quite appear to be a repeat of the Great Recession. However, there are some similarities in consumer behavior. This rise in credit card usage, especially in an environment of economic uncertainty, highlights the need for careful spending. Individuals need to understand the implications of high-interest credit card debt and explore strategies to manage it effectively. #CreditCardDebt #MindfulBorrowing #FinancialGuidance

During the 12 months leading up to January 2024, 2.7m adults were said to have sought help from a lender, a debt adviser or other financial support due to financial difficulty. 47% of those that sought help said they were in a better position as a result. So how does this affect the demographic of residential borrowers now needing specialist mortgage advice? Read our blog here:📰💻 https://bit.ly/3ybrexi | For intermediary only