- This is my research shared with you.
- Please verify everything before you use it for you.
- Compiled and analyzed by Jeff Tumbarello.
- The debt metrics are from the Federal Reserve website.
Economic News tends to be three things:
- Someone’s brochure passed off as stats
- Actual stats
- Stats that are driven by an agenda/confirmation bias
The Wall Street Journal ran this article and some local higher profile Real Estate personalities in SWFL mentioned this. They say the devil is in the details. Once you dig deeper into the data that is available, it tells a different story than the headline from the Wall Street Journal.
Mortgage Debt Levels Have Surpassed the 2008 Levels: Let’s look at Mortgage Debt Levels in the Country.
Mortgage Debt Levels Have Surpassed the 2008 Levels: Let’s examine 1 to 4 family debt levels.
If consumers were driving the rise in debt from the equity in their homes, this dataset would have grown past the 2008 levels. It has not.
Mortgage Debt Levels Have Surpassed the 2008 Levels: Let’s look at the M1 money supply.
The money supply growth in the same time frame is defiantly worth seeing and understanding. Would the same level of debt matter with the multiples of Money increasing by 400 percent? I think having the ration of mortgage debt to M1 from 2008 will be a nice benchmark to watch if you are trying to see the next crash of 2008 proportions.
Mortgage Debt Levels Have Surpassed the 2008 Levels: Total consumer debt.
This has clearly grown since the last crash and also in relation to the growth of the M1 money supply.
Mortgage Debt Levels Have Surpassed the 2008 Levels: Student loans.
The growth of this debt level is well-published in the media and has become a political issue as well.
Mortgage Debt Levels Have Surpassed the 2008 Levels: Motor vehicle loans.
This is another level of debt that has eclipsed the peaks of the last cycle.
Mortgage Debt Levels Have Surpassed The 2008 Levels: All Commercial and Industrial Loans.
Here we find the culprit of the mortgage loan growth. Most of this loan growth is in larger commercial assets. This amount of debt growth coupled with the very low cap rates inherent in today’s low yield market causes this to be an asset class to watch when we have the next rescission. The 1987 S&L crisis comes to mind.
Some parting thoughts:
- Debt levels for Mortgages have eclipsed the 2008 levels if you include all types of mortgages.
- 1 to 4 family debt has still not eclipsed the last cycle. The likelihood of another 2007 type crash for that asset does not appear likely. This is a direct result of Dodd-Frank.
- The primary debt growth for Real Estate mortgages is for commercial and multifamily. Expect the next correction to resemble the S& L crisis not 2007. Unless the metrics change and add the 1 to 4 family asset class into the same level of unsustainable debt.
It is a lot easier than you think to start investing in Real Estate. Whether you want to be a landlord, flip homes, or simply invest in companies that invest in Real Estate, there are many ways to get a quality return on your original investment. Join SWFL REIA for more helpful tips on breaking into real estate investment!
Stop making excuses — just get out and do it!
See you at a meeting soon!
The Southwest Florida Real Estate Investment Association is the leading source of SWFL real estate investing events that provide investment education and networking in southwest Florida. We analyze the housing market and foreclosures and provide information, education and networking events in order to build a network and knowledge base for investors and potential investors. Our members include real estate agent, brokers, investors, hedge fund managers, rehabbers, wholesalers and more.
Our SWFL REIA General Meeting is held in Fort Myers where we provide education on hot topics in investing and an opportunity to enjoy the camaraderie of your fellow investors. You’ll get a chance to ask for advice from successful real estate professionals and even make a few deals on your latest projects.
To become a member, anyone can register as an individual, a couple, or a corporation. Being a member opens the doors for endless networking opportunities, advice from members with decades of experience, new ideas from entrepreneurs, camaraderie with those just beginning, and deals and contracts done in the meeting room. For those interested in Cape Coral rental property investment and/or Fort Myers rental property investment, SWFL REIA will be able to provide a network to help launch a successful investment career.
The SWFL REIA is known and respected as a source of current, actionable and useful information about the housing market in the area that we meet.
We meet twice a month.
One of the premier sources for real estate investing networking and education is the SWFL REIA. In the real estate world, the SWFL REIA is different in that they do not do information product sales. Their meetings are focusing on the best ways of investing in real estate by collaborating with other property investors who are sharing their experiences.
We look forward to meeting you at a meeting soon!
Click here for membership information
Get our meeting notices and market data emailed to you.