The Federal Reserve puts out data on how much money we all owe every month. Here’s what you need to know about debt in the U.S. right now.
CONSUMER CREDIT, MAY 2019
– Consumers added $17.1 billion in debt in May 2019
– Total consumer credit owed is $4.08 trillion
– Debt growth at 5% for the year
– Revolving debt like credit cards rose 8.2%
– Non-revolving credit like student loans rose 3.9%
– Average credit card APRs at 15.13%
WHAT’S ALL THIS DEBT MEAN?
Rising debt levels sounds scary to those of us who remember the 2008 financial crisis. Everyone should pull all their money out of the bank and hide it under their mattresses, right?
Not so fast!
Consumer spending is the strongest part of the economy right now, and part of that is people spending on credit.
However, people are largely able to pay off their liabilities right now. For example, mortgage delinquencies, a measure of how many people are 30 days late or more on their home loan payments, are at a 20-year low.
So the spending part of the economy is in good shape. However, it’s not necessarily translating into more good jobs for the rest of us.
SOMETHING TO TAKE HOME
If you’re planning on buying or selling a home soon, don’t let these debt numbers scare you. This data tells us people are still confident enough in their own prospects and the economy to take on more credit.
As always, stay tuned to The Basis Point as we analyze all this for you.