While buyer demand has softened and sales fell 8.5% in March, the supply of homes on the market is contracting even faster
The economy is shrinking, businesses are closing and jobs are disappearing due to the coronavirus pandemic. But in the housing market, prices keep chugging higher.
Home prices plunged during the last recession after a housing crash caused millions of families to lose their homes. Home values could start to erode again, especially when mortgage forbearances end, some economists warn.
- Household debt rose to $14.3 trillion through the first three months of 2020.
- That’s $1.6 trillion higher than the record set in the middle of the financial crisis.
- Credit card debt actually fell during the period, helping to offset rises in education and auto borrowing.
Consumer debt hit a fresh record high to start 2020, even as credit card balances declined while Americans adjusted to the coronavirus pandemic.
Household debt balances through March totaled $14.3 trillion, a 1.1% increase from the previous quarter and now $1.6 trillion clear of the previous nominal high of $12.7 trillion in the third quarter of 2008 during the financial crisis, according to New York Federal Reserve data released Tuesday.
However, one area posted a notable decline.
Credit card balances fell $34 billion, a drop that helped offset non-housing balance increases of $27 billion in student loans and $15 billion in auto debt. Mortgage balances rose $156 billion to $9.71 trillion.
“The credit card balance decline was notably larger than the same period last year, which may reflect the early signs of decreased consumer spending due to COVID-19,” the New York Fed said in a release.
That decrease in card balances came even though total credit limits increased by $34 billion, leaving $3 trillion in available credit lines.