Interest rates may be falling but personal debt levels in this country are not.
We crossed over the $3 trillion mark in terms of total debts owed to financial institutions last September. By November, the latest data we have available, that mark had risen another $25 billion which represents an accelerating rate of growth.
About two-thirds of that total – just over $2 trillion – is secured by mortgages on properties and virtually all of that is held by the chartered banks.
This is a sign that home prices are not pulling back and, despite falling interest rates lately, we are not making extra payments on loan principal, likely because renewing mortgages are still being caught by higher rates from our inflation fighting days.
And loans for things other than buying property are rising too….not nearly as fast but still going up. The good news bit in this report is that credit card balances are declining.
On the corporate side, loans held by smaller, private businesses grew a bit in November but was basically comparable to the same time a year earlier.
