Why do you insist on lying? I said consumer spending has remained strong which is a good thing for the economy. Just not for the people who can't afford it.
90 day credit card delinquency rate reaches 14%
- Thread starter PabloNole
- Start date
A lot of that spending is from credit cards which consumer can't pay back. That's definitely bad for the economy.
I NEVER said that people intentionally drive up interest. I DID suggest that people often lack discipline and they keep digging their hole deeper.
Here's a true story. A guy worked for me (15+ years ago) that was constantly complaining about his wife's spending and related credit card debt. One day he came to me and asked if he could leave an hour early because a local place had a fancy computer monitor on sale for $100. I told him that you mean $120. He said no, why do you say that? I said because you'll put it on the credit card and end up paying $120 with interest. He said I was wrong because he was going to pay cash. I said it's still $120 because you could use that $100 to pay down your existing credit card debt.
There are all kinds of stories like this where people lack financial discipline. I don't agree with Dave Ramsey on everything but I do agree with him when he says "Live like no one else so that later on in life you can live like no one else". My original post said I would support the government limiting credit card interest rates with the full understanding that banks would reduce credit limits on people with a questionable credit history. IMO that would be a good thing because it would force discipline.
I don't know about a 3rd job but I definitely think lot of people should cut back on spending and get a second job if necessary to avoid credit card debt, save to buy a house, etc. It makes ZERO sense to keep going into high interest debt.
That's not a comment about affordability which can be debated separately.
Interestingly, I posted a while ago comparison written in the WSJ about baby boomers vs other generations at specific age groups 24-35 (if I remember correctly) Without trying to remember the entire article, the one item that that stood out to me was the comparison concerning buying a house. The article showed that boomers cost during the age group period of the buyers was significantly higher than for millennials and gen z. Back then interest rates were so high and housing prices as adjusted for inflation, demonstrated that boomers had it worse.
You said it was a good thing, if people pay on time. Clearly a lot of people aren’t paying on time.
My dad worked two jobs when I was a kid and he built our first (small) house with his own two hands on weekends. He wasn't the only one in our middle class community working two jobs at the time. When I graduated college the unemployment rate was 7.7% and the inflation rate was 5.8%. I agree with you that the argument that things used to be easy is weak.
I bought our first house in 1977 for $50k. My son bought his first house in 2021 for $220k. I ran the numbers through an inflation calculator and it said that $50k in 1977 was equivalent to $225k in 2021 so not much difference. I know it's not a perfect analysis. Both houses were small (1300 sq ft) but mine was new and his was old. Both were in a similar part of the country. The big difference was that I was lucky to get an 8.5% conventional mortgage while my son got a 2.6% conventional mortgage.
I looked up home price inflation by year and it looks like it's been running between 2% and 4% by year for decades with one exception. It was 7.15% in 2022 and 6.44% in 2024. IMO the price jumps during that period were caused extremely low interest (mortgage rates). Rates are higher now but supply remains depressed because people don't want to move and give up their low rates. IOW the government caused the problem and it's going to take time for the market to correct it.
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you should have waited until the early '80s to buy. We bought our first home in 1982 and mortgage rate was 13.5%
Our builder had a block of money secured at the 8.5% rate and we were one of the last ones to get it. Two weeks later people were paying closer to 12% and eventually 16%. Some of the homes built on our street were sold without garages to save money.
We had buddies who financed at 14 and 13 % respectively. My grandad offered us 10% in 1985, , saying that it would be a higher return than he could get elsewhere at the time. Thank you, sir!
Closer to 80 than 40, if you know what I mean.
I, as have obviously you, have seen most of these “movies” before. The endings are pretty predictable.
I bought my first house in 1986. 15 year note at 13%. Didn't think anything of it because those were the rates.
Florida foreclosures are up because people bought at the peak than hurricanes hit making insurance unaffordable. Those higher prices caused home resale values to decline. I don't think that's a "general economy" type of issue.
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It seem like that to you because your mind is consumed with TDS. But I'd glad "awareness" works for you and your solution is to support people going deeper into debt. Maybe throw in some loan forgiveness.
Hurricanes always hit there. That is baked in. Folks there are bailing because of massive increases and or unavailability regarding insurance and looming costs regarding postponed maintainence in condos and apartments.
It is time to pay the piper.
insurance is only one of the issues down here. A lot of the developments have HOAs. When developers are selling they "buy down" those HOA fees. In my over 55 community, when I bought, you got the maintenance free experience - lawn care to include weed, feed cutting, trimming, water; the amenity package pools hot tubs, tennis, pickleball; clubhouse - all for $170/month. And a lot of these folks thought the fees would never go up...
Then there are the Community Development Districts (CDD). Down here developers take out bonds for all the infrastructure and pass on those to the community. So the CDD has it'sown little fiefdoom...responsile for the roads, the drainage and a bunch of other things. Right now our CDD fee is just about as high as the taxes.
But, the offset is no income tax
I own property in Florida. No major hurricane damage for nearly a decade then 3 major hurricanes in 2 years. Insurance prices tripled assuming you could get it. If your insurance goes from $3k to $10k it's going to put a squeeze on you that has very little to do with the general economy.
That rise in insurance has everything to do with the general economy in that area. Everything gets down to local eventually.
Florida has been oversold since the 1920s. Boom and bust is inevitable there. My dad’s people lost big in the Great Depression to Ed Ball due to inability to pay property taxes on timberland.
He owned St.Joe Paper Company and the railroad across the panhandle and was eventually the state’s largest private landowner. You may know his holdings as Arvada… big into development.
Can you point to any post in which I have mentioned or referenced Trump at all?
I do not support people going deeper into debt, and I do not believe that I have stated anything suggesting that I believe that people should go deeper into debt.
He can't but it's the default when those with Trump Defense Syndrome know they have nothing else.
Yes, insurance is high. Insurance prices are high for two reasons, hurricanes and inflation.
Home prices have not declined that much. Very slight to steady.
I would be intrigued to know if the article takes into account condo foreclosure. Those aren’t hurricane induced though. Those are largely due to huge assessments based on years of neglect and ****** construction during the boom years in the early 2000’s.
Just FYI, @bdgan is another vagabond who started coming here a few months ago and isn't connected to Clemson either. He's fairly intelligent, but if you make a counterpoint to him or prove him wrong he ALWAYS does 1 of 2 things: He either just completely dips out of the conversation OR he claims what you've stated is TDS or Anti-Trump and nothing more.
He doesn't have much more than the "you have TDS" shtick even if you don't even mention Trump.
Just like I said nothing about Starbucks or avocado toast.
The original post was about credit card delinquency rates going up and follow up comments suggested that the current (Trump?) economy is a mess. I responded by saying people with credit card debt should cut expenses and get a second job if necessary in order to get out of credit card debt. For that comment I was called hateful and unamerican. You and others accused me of having a severe lack of awareness. That's what I'm responding to. It's tough but the choices are to continue to spending money you don't have at 20%+ interest or take steps like I suggest. Do you have a better more "aware" option?
auto insurance is high too. I was told that reasoning was large number of uninsured motorist. Don't know if that's accurate, but my rates are higher here than in either Pa or Va
people think differently about money today than in our formative years.
And, we don't do a very good job in teaching about personal finance basics.
I have a better option. Higher paying working class jobs. Eff the notion that people have to work 60 hours a week to afford stuff.
I did not state that you had said anything about Starbucks or avocado toast. I explicitly articulated that "this seems similar...," but I apologize if you feel that I misrepresented your position.
I did not call you hateful or unamerican [sic], but I do think that your position is overly harsh and lacking compassion for people who are suffering. I believe that being aware that many people with credit card debt are not able to cut expenses or get second jobs is important. I believe that the better option is to consider all of the factors: personal, circumstantial, societal, etc., that are placing tens of millions of our fellow Americans in dire financial situations and to attempt to develop comprehensive strategies for assisting and supporting these people.
That’s part of it. The auto insurance market has actually gotten slightly better in the last year. Florida is a no-fault state, so that hurts. Fraud is also high in Florida. The bad news is the fix is only good if you don’t legitimately need an attorney.
I also apologize if I misrepresented your position but to be honest I don't know what your position is other than that you feel sorry for people who are struggling. I share that concern but I also believe a lot of people lack a sense of personal responsibility or financial discipline. I think they can either take the steps necessary to resolve their problems or they can keep digging their hole deeper while complaining to the government (democrat or republican) that life is unfair. I think they would be better off doing what's necessary to resolve their own problems. Do you have a better solution?
Half of a lot of people's income goes towards rent. Not much you can do when under those financial pressures.
And the better solution is better paying jobs for the working class.
Your chart shows an average home price of $57,500 in 1977. I paid $50,000 so that's in the ballpark.
Your chart shows an average home price of $214,200 in 2001. That's slightly under what my son paid in 2001.
That tells me my numbers were pretty good and that home price inflation was reasonably aligned with overall inflation to that point. Like I said there were two years of much higher home price increases immediately after Covid when interest rates were kept artificially low. That worked out great for my kids because they got mortgages well below 3%. That easy money also contributed to higher home prices that persist today. People don't want to sell and move up because they don't want to give up their 2.5% mortgage. IMO it's going to take time for the market to correct itself. I don't think more easy money is the answer. That's like loaning kids more and more money to go to college and expecting tuition prices to fall.
JMO.
And how do you do that without it being inflationary?
A lot of good paying jobs have gone offshore because costs are lower in other countries. Would you be willing to pay $200 for a shirt made in the USA compared to $40 for s shirt made in Asia? People want the lower cost AND the higher pay but it doesn't work that way.
Some say increase taxes on businesses. Do you think that will entice them to stay and invest more in the U.S.? Some say tax the billionaires. I actually support that to a point but I would use the money to reduce the deficit. It wouldn't lower housing prices, insurance costs, or grocery prices.
