Household Debt, Housing Inventory, U.S. Stock Markets

February 22, 2016

Monday – February 22

The Federal Reserve Bank of New York reported on Monday that aggregate household debt balances increased slightly in the fourth quarter of 2015. As of December 31, 2015, total household indebtedness was $12.12 trillion, a $51 billion (0.4%) increase from the third quarter of 2015. Overall household debt remains 4.4% below its 2008Q3 peak of $12.68 trillion. The bank went on to say that only 2.2% of home mortgage debt was at least 90 days delinquent as of December 31, 2015, compared to 3.4% of auto loans, 7.7% of credit card debt and 11.5% of student loan debt.

Fitch Ratings recently released a report that showed that housing inventory has not expanded as much from the Great Recession as it has in past recoveries. The December 2015 existing home inventory of 1.79 million (3.9 months of sales) was down 12.3% compared with November 2015 and was off 3.8% compared with December 2014 and down 3.8% versus December 2013. Fitch cites the lack of availability of better located lots suitable for the trade up market. Broad lot development has lagged as many land developers left the industry during the most recent down turn and those that remained were cautious or financially constrained.

U.S. Stock markets continue to push higher today after hitting the 2016 lows on February 11. Since that time, the closely watched S&P 500 has risen 5% since the low of 1,810 hit on February 11, trading at 1,943 today. Signs of stability in China along with rising oil prices are a few reasons for the recent rise in Stock prices. This week economic data will cover a large portion of the U.S. economy as investors will gauge the health of the economy.