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Issue #1263: The consumer squeeze is real

Issue #1263: The consumer squeeze is real

Sep 15, 2022
Marty's Ƀent

Issue #1263: The consumer squeeze is real

One trend that has been flying a bit under the radar and probably should be more of a point of focus is the effect the Federal Reserve's hawkish policy is having on residential mortgage rates held by US consumers. As you can see from the tweets above from Charlie Bilello, average monthly payments on newly originated mortgages, or those that are subject to variable rates, have increased by 96% over the last two years. This seems to be an important data point that is missing from CPI calculations that have been coming in at high single digits for the better part of this year. Especially when you consider that housing payments make up a material amount of Americans' monthly expenses. Even if someone is renting their house or apartment, one would have to imagine that this significant increase in monthly payments is being passed on.

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