The reasoning for this is due to a recent survey conducted by Apartment List, which states that missed payments have begun to stabilize in the month of June, however, at very high, alarming levels.
(Source, Apartment List)
Here are a few key, very startlingly points that were indicated in their recent survey;
- In June, 30 percent of Americans missed their housing payments, down slightly from 31 percent in May but still up from 24 percent in April.
- Missed payments continue to concentrate among renters, younger and poorer Americans, and those who cannot work remotely.
- A majority of payments missed at the beginning of the month are paid by the end of the month. But those who do not pay on-time in one month are much more likely to miss a payment in the following month.
Breaking this data down further backs up their statement that renters were the most likely to skip their payments (32%), which makes sense due to the fact that they have the least to lose, however, what is truly stunning is the fact that those with mortgages only scored three percentage points lower (29%).
Carrying on with a trend that is appearing in many sectors of the economy, those most affected were under the age of 30, with approximately 40% of adults in this age bracket skipping out on payments, while the numbers decreased among older age brackets.
Additionally, and unsurprisingly those in a lower earning bracket were also much more likely to either not pay, or only partially pay their housing payments.
This tidal wave of missed payments is a trend that is likely to continue for a number of months and of which has the possibility to send countless people spiraling out of control, whether it be landlords who are sunk due to a wave of missed payments, banks who are seeing their bottom lines slashed, or the individuals who are forced eventually into default, as the payments finally come home to roost.
However, don't think for a second that this problem is isolated to the just the housing market, as I previously mentioned, housing payments are typically one of the last things to not be payed, which means that we have a very, very serious problem on our hands.
According to data from TransUnion, approximately 106 million Americans have skipped out on payments of all sorts, across all sectors, since the start of March.
Forbes reports;
- The number of accounts that requested deferred payments, forbearance or any other similar type of relief since March 1, and continue to stay in such a state, stood at 106 million at the end of May.
- The numbers at the end of May are three times larger than what they were at the end of April, signalling a steep increase in economic hardship.
- 7.3 million auto loan accounts have also sought similar relief along with 1.3 million personal loans.
As indicated above, the auto sector is another sector of the economy that has been hit hard, with many skipping out on payments, or deferring them until a later date.
This comes in tangent with a sharp decline in both used and new auto sales, which will have rippling effects across the industry for years to come.
(Source, barchart.com)
Meanwhile, in the delusional land that is Wall Street, everything looks just peachy, as stocks continue to trade at absurdly high prices, shrugging off reality and trending higher, steadily moving back to old pre-coronavirus highs.
This is because nothing seems to matter anymore, reality doesn't matter, data doesn't matter, facts don't matter, what does matter is that the printing presses keep churning out fiat dollar bills and the stimulus keeps flowing.
We are living in a completely artificial market, that is willing to completely ignore the debt bomb that is being primed right under its feet, set to go off any day, any month now.
This has the potential to bring the system to its knees, either forcing a debt jubilee in one form or another, or forcing the Fed into a printing frenzy the likes of which will make the last few months look like child's play, which as seen from the chart below, is nothing to scoff at.
(Chart Source, Federal Reserve)
Unfortunately, I strongly believe that the "powers to be" will choose to protect their true constituents in the banking sector, just as they did in 2008, running to their rescue and choosing to bail them out once again, rather then letting them collapse due to the many mistakes that they have made.
(Chart Source, goldprice.org)
Meanwhile, both gold and silver bullion are under renewed attack today, doing the exact opposite of what they should be doing, which is moving higher, mitigating and accounting for the incredible risk within the system, the ballooning debt creation and the plethora of fiat money creation.
Seems sane right?
Keep stacking.
- Source, Nathan McDonald via the Sprott Money Blog