The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: bozwood who wrote (11425)	7/1/2003 2:06:34 PM
From: Mr. Sunshine	Read Replies (1) of 306849

Thanks for that link! It explains a lot. The previous graphic supplied by Grace was only for Consumer debt and did not include mortgage debt. We are at 14% now, which was also reached in 1987. Not alarming, IMO. Seems the ratio has historically been in the 12-13% range, with a few dips down to the high 11% and up to the low 14% range. Still, I wonder if this is at all reflective of the average middle class American. Many of the lower income live on a cash basis. So they have income but no monthly debts, pay rent instead of a mortgage, and would thus have a much lower (possibly zero) ratio. The richer folks do not owe as much either compared to their income, also lowering the ratio. If you removed the very top and the very bottom income levels, I think that ratio would rise significantly. The people I deal with usually have total debt levels of 20 to 50% of GROSS income, so the 14% of disposable income seems very, very low. I may be biased. In my mortgage loan business, I tend to see only those who need loans and thus have more debts. My 2 cents worth.

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