It is commonly understood that the U.S. economy relies heavily on consumer spending and consumption. However, if this spending and consumption becomes unsustainable, such as when consumers take on too much debt, it can become a problem.
This issue has recently been brought to light by the Federal Reserve of New York’s Q2 2024 Household Debt and Credit Report which revealed that household debt had reached $17.8 trillion. This figure has sparked concern among many about the potential consequences of high levels of debt.
John Chang, Senior Vice President at Marcus & Millichap’s National Director for Research and Advisory Services, addressed this issue in a video titled “Will Elevated Debt Threaten the Economy?” He broke down the different types of household debt:
– $12.9 trillion is from mortgages and home equity lines of credit
– $1.6 trillion is from student loans
– $1.6 trillion is from auto loans
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