Consumer Strength Eases Household Debt Concerns for CRE
Household Debt Is Elevated, But Remains Manageable
- Total household debt reached an all-time high as of 2Q 2024
- Over 70% of the debt is housing-related, placing less of a financial burden on most households, as much of that debt takes the form of low-interest rate mortgages and home equity lines of credit
- Non-housing debt, including auto loans, student loans and credit card debt, is also at a high, impacting some households more than others
Job Growth And Wage Gains Are Sustaining Economic Growth
- U.S. employment is at a record level, with over 2 million jobs added in the past year
- Wage growth outpaced inflation over the past 12 months
- Strong employment and wage growth are offsetting rising debt levels
Consumers Remain Healthy, Supporting CRE Space Demand
- Household debt service payment levels are below historical norms
- Financially-strong consumers are supporting demand for apartments and self-storage, as well as retail and industrial space
- Healthy household balance sheets should also translate to optimism regarding leisure travel, strengthening demand for hotel rooms
*Through 2Q
Sources: Marcus & Millichap Research Services, Federal Reserve
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