The Federal Reserve Bank of New York released a new report highlighting that in Q3 2024, U.S. household debt rose by $147 billion (0.8%) from the previous quarter, reaching $17.94 trillion. This is an increase of $3.8 trillion since 2019. Mortgage balances grew by $75 billion to $12.59 trillion, while HELOC balances rose by $7 billion, marking the 10th consecutive quarterly increase to $387 billion. Credit card debt increased by $24 billion to $1.17 trillion, up 8.1% year-over-year. Auto loans rose by $18 billion to $1.64 trillion, and student loan debt increased by $21 billion to $1.61 trillion.
Source: NY Fed (November 2024)
Onnah Dereski of the National Association of Home Builders (NAHB) reports on the NY Fed data, noting that consumer debt growth had slowed due to inflation and high interest rates but saw an uptick, possibly influenced by anticipated rate cuts. Consumer debt rose to $5.10 trillion, growing at an annualized rate of 3.28%, up from 1.14% in the previous quarter.
Logan Mohtashami of HousingWire comments on the above data, noting that despite a rise in debt, this is not a worrisome sign of over-burdened households or real estate markets. “The housing bubble crash theory has failed once again as we approach the end of 2024, but it’s always important to know why something didn’t happen. This week, we got the updated New York Fed credit data report, which shows the strong position of homeowners — especially in comparison to the years before the Great Financial Crisis.”
ATTOM Data Solutions reports on distressed real estate, highlighting that U.S. foreclosure activity rose 4% month-over-month in October to 30,784 filings but remained 11% lower year-over-year. Foreclosure starts increased by 6%, while completed foreclosures rose by 12%. Nevada, New Jersey, and Florida had the highest rates, reflecting regional disparities, though overall levels remain historically low.
Indeed, the Mortgage Bankers Association (MBA) reports that mortgage availability rose by 0.7% in October, reaching 99.2 on the Mortgage Credit Availability Index (MCAI), the highest level since April 2023. Conventional credit availability increased by 1.0%, driven by a 1.2% rise in Jumbo loans and a 0.9% increase in Conforming loans, while Government credit availability rose 0.4%. Despite these gains, overall credit supply remains tight, with improvements focused on specific segments such as cash-out refinances, lower-LTV, and higher credit score borrowers. Joel Kan, MBA’s Vice President and Deputy Chief Economist, notes:
“Mortgage credit availability increased to its highest level since April 2023, driven by gains across all loan categories. However, despite the across-the-board increases, overall credit supply remains tight, with the index still near the very low levels of 2011-2013…Notably, while credit availability was higher over the month, it was for a specific segment of borrowers. Credit supply improved in loan programs for cash-out refinances and those that require lower-LTV and higher credit scores. Additionally, there was greater availability of jumbo loan programs, which pushed the jumbo index up over the month.”
Post-election activity
Glenn Kelman, CEO of Redfin, wrote post-election about the implications of a Trump presidency on real estate. “Donald Trump’s re-election seems to have had immediate consequences for housing in America. Demand from home-buyers requesting service through Redfin’s site, which was already stronger since the Federal Reserve’s September 18 rate cut, was about 25% higher this weekend than the same weekend last year, the largest year-on-year gain since the downturn began in 2022. Some buyers are undoubtedly enthusiastic about a Trump economy; others may have been waiting to make major decisions until after the election.”
Dana Anderson of Redfin also reports that 22% of U.S. residents are more likely to move post-election, with 36% considering another country—the most popular relocation choice—and 26% another state. Younger adults (18-34) and Democrats are more likely to consider relocating. Meanwhile, 21% of respondents are less likely to move after the election.
Ana Teresa Solá of CNBC reports that mortgage rates have shown signs of stabilization following the election, with the average 30-year fixed rate at 6.78% as of Nov. 14, down slightly from 6.79% the prior week, according to Freddie Mac. However, after Donald Trump’s election, borrowing costs rose earlier this month as bond markets reacted to inflationary concerns tied to potential policies like increased government spending and tariffs. While presidents don’t directly influence mortgage rates, market expectations around inflation and the federal funds rate drive post-election rate fluctuations.
Source: CNBC (November 2024)
Maiclaire Bolton Smith of CoreLogic reports that the Trump administration has historically favored deregulation, which could lead to rollbacks of Biden-era climate initiatives, reduced regulatory scrutiny, and changes in Fannie Mae and Freddie Mac oversight. These moves could impact flood risk management, housing affordability, and zoning debates, potentially reshaping lending and property markets nationwide.
Shelter inflation
Danielle Hale of Realtor.com reports that shelter inflation rose 4.9% year-over-year in October, moderating from earlier peaks but above the pre-pandemic average of 3.3%. While lower energy prices helped offset overall inflation, a month-to-month increase in shelter costs signals persistent pressure on housing expenses. With mortgage rates staying high and housing activity subdued, affordability challenges remain crucial for buyers and renters, influencing both housing demand and broader inflation dynamics as the Federal Reserve considers its next policy moves.
Jeff Andrews of HousingWire reports on this topic, highlighting that shelter costs now account for over half of the monthly CPI increase. This persists despite overall inflation moderating to 2.6%, as higher rents and home prices squeeze household budgets. While energy costs have fallen sharply, offsetting some inflationary pressures, uncertainty surrounding government spending and potential policy changes under Donald Trump’s upcoming administration could reignite inflation.
Source: HousingWire (November 2024)
Andrew Dehan of Bankrate reports on housing costs, noting that year-over-year home prices grew 3.9% as affordability challenges persist due to high mortgage rates and elevated prices, keeping housing a key pain point for many Americans. Despite recent rate cuts by the Federal Reserve to combat slowing inflation, the housing market remains under pressure, with mixed signals for buyers and sellers. While optimism exists for moderating price growth, high costs constrain affordability nationwide.
Indeed, Fan-Yu Kuo of NAHB reports on this topic, noting that “the 2024 election result has put inflation back in the spotlight and added some downside risks to the economic outlook. Proposed tax cuts and tariffs could increase inflationary pressures, suggesting a more gradual easing cycle with a slightly higher terminal federal funds rate. Given the housing market’s sensitivity to interest rates, this could extend affordability crisis and constrain housing supply as builders continue to grapple with lingering supply chain challenges.”
