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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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- Households find themselves in a strong financial position when it comes to debt servicing, close to record lows at sub-10% of disposable incomes when covering both mortgages and consumer credit. Coupled with the popularity of very long fixings helping shield existing homeowners from the 200+bp surge in 30Y mortgage rates, it helped mortgage delinquencies touch record lows of 3.6% in 2Q22 according to the MBA in data going back to 1979.
- Inflation concerns are clearly at the forefront of consumers’ minds currently, especially lower income groups where inflation disproportionately eats into disposable income, but for now these macro indicators don’t yet show intensifying difficulty in meeting mortgage obligations despite sizeable declines in real earnings. This could limit the risk of housing-related feedback into consumption, which clearly has a much larger share at 68% GDP than the homebuilder-direct component of residential investment.
- That said we’re still at an early stage of any deeper housing market correction though, whilst we note it’s worth watching credit card usage (surging in recent quarters), for any signs of further reliance on new debt to meet prior financial commitments.
Fig 3: Debt Servicing, Mortgage Delinquencies and Consumer Credit Growth
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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