Millions and millions of Americans buy homes every year as shelter cost, not an investment. Mortgage debt never had boom after the bubble crashĪnother aspect of consumer debt and mortgage debt that people don’t appreciate is that we never had a housing boom in credit or sales post-2010. If It weren’t for COVID-19, we would still be having the most prolonged economic and job expansion ever recorded in U.S history today. Not only do we have better mortgage lending standards post-2010, but the 2005 Bankruptcy Reform laws also created better consumers. If there is one thing about consumer credit that I will put on top of the list, it’s this fact: dull, fixed low debt cost with rising wages is the sexiest economic firepower we have in America. We can see a slow and steady positive downtrend in stressed financial data, unlike in the 2005-2008 period where people filed for bankruptcies and foreclosures without a job loss recession. economy. As you can see below, when you lend to the capacity to own the debt, you should never see a rise in foreclosures or bankruptcies unless a job loss recession happens on a massive scale. This was very critical to not only the housing market but also the health of the U.S. What happened post-2010 is that exotic loan debt structures that don’t provide long-term fixed debt products left the system. ![]() People who make the most money, excluding the 1% and 0.01%, usually have the most consumer debt because they’re homeowners. I can’t emphasize enough how critical this aspect is to the American economy. Post-2010, lending standards in America became normal again, and while I still believe they’re very liberal, they’re sane. The most important factor is that debt structures are vanilla. Let’s take a look at the New York Federal Reserve’s Household Debt and Credit Report for the third quarter, released today. ![]() One of the most unloved American economic success stories has been how spectacular American households with mortgage debt look today.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |