Will Elevated Debt Threaten the Economy

Consumer Strength Eases Household Debt Concerns for CRE ​

Household Debt Is Elevated, But Remains Manageable ​

• Total household debt reached an all-time high as of 2Q 2024 ​

• Over 70% of the debt is housing-related, placing less of a financial burden on most households, as much of that debt takes the form of low-interest rate mortgages and home equity lines of credit ​

• Non-housing debt, including auto loans, student loans and credit card debt, is also at a high, impacting some households more than others ​

Job Growth And Wage Gains Are Sustaining Economic Growth ​

• U.S. employment is at a record level, with over 2 million jobs added in the past year ​

• Wage growth outpaced inflation over the past 12 months ​

• Strong employment and wage growth are offsetting rising debt levels ​

Consumers Remain Healthy, Supporting CRE Space Demand ​

• Household debt service payment levels are below historical norms ​

• Financially-strong consumers are supporting demand for apartments and self-storage, as well as retail and industrial space ​

• Healthy household balance sheets should also translate to optimism regarding leisure travel, strengthening demand for hotel rooms ​

*Through 2Q​
Sources: Marcus & Millichap Research Services, Federal Reserve​

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