3 ms·

Came here to basically say this - it’s got me scratching my head for sure. I bet not taking on more debt in uncertain times but many folks don’t have a choice.

Came here to basically say this - it’s got me scratching my head for sure. I bet not taking on more debt in uncertain times but many folks don’t have a choice. Any idea what could be driving this?

sambull 6y ago
Reduced cost of living. Lots of my neighbors have relatives that have moved-in recently. Houses are becoming more multi-generational/multifamily.
- gpm 6y ago
  > Lots of my neighbors have relatives that have moved-in recently. I haven't noticed this with my neighbors (I'm not sure I would), but amongst my friends and myself I can definitely second this. It does make me wonder about this line > The real estate market has been red hot after an initial slowdown during quarantine: (Median house prices) Maybe it's the case that predominantly rich people are buying/selling right now?
  - slowbait 6y ago
    Or families are expanding as relatives are moving in?
    - gpm 6y ago
      Hmm, maybe, several apartments merging to one house could explain it. If so that bodes ill for apartment-building-owners.
  - endogui 6y ago
    From my personal contacts, it seems that those who can afford it are now moving out of the cities or acquiring rural "vacation" homes. The people I know who are buying are all upper managers or higher in salary.
  - mleo 6y ago
    Our Southern California beach city has seen 60% increase in home sales over last year and the median price is on more higher priced homes than is typical. These are almost all single family homes with space. If you have to work from home, it is nice to have an extra bedroom or dedicated office.
ldayley 6y ago
My bet is that some of the biggest categories for personal credit card spending are related to travel and bars/clubs, including the specialized clothing and accessories that surround those activities. Folks may have paid some debt off, but not many were spending for these big activities at all. I imagine there’s a lot of cross-over with demographics that tend to carry more debt or be more impulsive to begin with. Edit: ...also dining out
- mleo 6y ago
  Personal anecdote; we didn’t have to pay for after school care or kids summer activities for many months now, allowing us to pay down credit cards.
Spooky23 6y ago
All sorts of things. No vacations, no evictions, cut credit limits, limited retail, no commutes, etc. In my neck of the woods, real estate is insane and people are refinancing. Lenders are writing 90% LTV loans at 2.7%
trynewideas 6y ago
Since interest rates bottomed out, my credit union has been sending twice-a-week promos for $8-$10k personal loans to consolidate and pay off credit card debt. The rates are typically 7-10%, cheap compared to a lot of bad-credit-allowed card issuers, and I've seen some lenders go as far down as 6% on up to $100k over 2-3 year repayment periods. The loans are probably considered low risk between the combo of stimulus checks, tax refunds (July 15 was the filing deadline so rebate checks are hitting now or soon), juiced-up unemployment benefits, and rent forgiveness/deferral all hitting at once. So I'd be curious to see if there's any correlation between credit card debt and "personal" (non-mortgage, non-auto) loan balances. It could just be refinancing via consolidation.
sixothree 6y ago
My credit cards had been on auto-pay some small amount for a few months. I'm lazy and never logged in and paid the balances. But I had the cash in the bank. So when the crisis hit I paid them off because of the unknowable future.

sambull 6y ago

Reduced cost of living. Lots of my neighbors have relatives that have moved-in recently. Houses are becoming more multi-generational/multifamily.

gpm 6y ago
> Lots of my neighbors have relatives that have moved-in recently. I haven't noticed this with my neighbors (I'm not sure I would), but amongst my friends and myself I can definitely second this. It does make me wonder about this line > The real estate market has been red hot after an initial slowdown during quarantine: (Median house prices) Maybe it's the case that predominantly rich people are buying/selling right now?
- slowbait 6y ago
  Or families are expanding as relatives are moving in?
  - gpm 6y ago
    Hmm, maybe, several apartments merging to one house could explain it. If so that bodes ill for apartment-building-owners.
- endogui 6y ago
  From my personal contacts, it seems that those who can afford it are now moving out of the cities or acquiring rural "vacation" homes. The people I know who are buying are all upper managers or higher in salary.
- mleo 6y ago
  Our Southern California beach city has seen 60% increase in home sales over last year and the median price is on more higher priced homes than is typical. These are almost all single family homes with space. If you have to work from home, it is nice to have an extra bedroom or dedicated office.

ldayley 6y ago

My bet is that some of the biggest categories for personal credit card spending are related to travel and bars/clubs, including the specialized clothing and accessories that surround those activities. Folks may have paid some debt off, but not many were spending for these big activities at all. I imagine there’s a lot of cross-over with demographics that tend to carry more debt or be more impulsive to begin with. Edit: ...also dining out

mleo 6y ago
Personal anecdote; we didn’t have to pay for after school care or kids summer activities for many months now, allowing us to pay down credit cards.

Spooky23 6y ago

All sorts of things. No vacations, no evictions, cut credit limits, limited retail, no commutes, etc. In my neck of the woods, real estate is insane and people are refinancing. Lenders are writing 90% LTV loans at 2.7%

trynewideas 6y ago

Since interest rates bottomed out, my credit union has been sending twice-a-week promos for $8-$10k personal loans to consolidate and pay off credit card debt. The rates are typically 7-10%, cheap compared to a lot of bad-credit-allowed card issuers, and I've seen some lenders go as far down as 6% on up to $100k over 2-3 year repayment periods. The loans are probably considered low risk between the combo of stimulus checks, tax refunds (July 15 was the filing deadline so rebate checks are hitting now or soon), juiced-up unemployment benefits, and rent forgiveness/deferral all hitting at once. So I'd be curious to see if there's any correlation between credit card debt and "personal" (non-mortgage, non-auto) loan balances. It could just be refinancing via consolidation.

sixothree 6y ago

My credit cards had been on auto-pay some small amount for a few months. I'm lazy and never logged in and paid the balances. But I had the cash in the bank. So when the crisis hit I paid them off because of the unknowable future.