As the US waits for what is expected to be a soft landing for the economy, questions remain about the financial resilience of US consumers. Elevated debt could restrain consumer spending, an important driver of economic growth.
"If people get too far out over their skis by borrowing too much money, the economy could hit a wall," said Marcus & Millichap national director of research and advisory services John Chang.
As of the second quarter of this year, total household debt was at a record high of $17.8 trillion. Nearly three-quarters of that debt, $12.9 trillion, is housing debt including mortgages and home equity lines of credit, which are at very low interest rates. Most people have a fair amount of equity in their homes, which means housing debt is unlikely to be a problem, said Chang.
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