When will it get messy for our Drunken Sailors? Not now.
By Wolf Richter for WOLF STREET.
Mortgage balances outstanding ticked up by 0.9% in Q4 from Q3, to a record of $12.3 trillion. Year-over-year, the increase was only 2.8%, according to data from the New York Fed’s Household Debt and Credit Report.
This small increase in mortgage balances is the result of a strange mix: Purchases of existing homes have plunged by one-third, and mortgage origination volume has collapsed, with existing home prices still sky high; but new house sales have held up, as prices have dropped 17%. And homeowners with these infamous 3% mortgages are not selling, and they’re not buying, and so they’re not paying off their 3% mortgages, and they’re not getting bigger new mortgages.