Property debt burdens

With households' property debt surging, the use of adjustable-rate mortgages increasing, and interest rates rising, some observers have raised concerns about households' ability to service that debt. To gain a better idea of the distribution of property debt burdens and how it has changed over time, this Economic Letter presents data from the Survey of Consumer Finances (SCF), which contains information on different types of property debt, debt service, and income. The SCF data show that property debt burdens in 2004 were only slightly higher than they were in the mid-1990s. Also, although the use of adjustable-rate mortgages has increased, many households that have some of their property debt in these instruments have fairly low debt burdens, suggesting that they could successfully adapt if their mortgage payments were to increase.