“Statistically speaking, families with more income have more so-called “excess” spending and therefore more opportunities for trimming.”
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True statement in terms of total dollars spent. However, the lower the income the higher the percentage of that income is spent on “wants” vs. “needs”. For example, I might want a $1500 iPhone 14 complete with a $80/month unlimited data plan with 2 year contract but all I need is a used $160 iPhone 7 on a pay as you go monthly $30 plan.
Add to that homes they cannot afford, cars they cannot afford and vacations they cannot afford. Savings in the bank? How quaint.
The real economic crash will come when the bulk of the middle class upper/mid/lower defaults on car and home payments. This is going to happen the only question is when. The unwillingness to part with the iPhone 14 at the expense of the roof over their heads will be the result.
I have read that 40% of American families age 60-79 that own homes have a mortgage on their primary residence. That means that a large number of retired or near retired homeowners are making monthly mortgage payments. Nothing screams “I’m unprepared for retirement” quite like taking a mortgage with you for the retirement ride.
Car repossessions are on the rise NOW...
Which should indicate housing will follow in about 6 months.
We are going to have a lovely summer.