What is mortgage stress
05/08/08 06:34 AM
The number of households struggling to meet
mortgage repayments jumped 15% to 784,000 in May
and is likely to reach 923,000 by September, Martin
North, head of Fujitsu Consulting, predicted.
Mr North, who developed the "Stress-o-Meter" and produces an authoritative biannual report on the home-loan market, said mortgage stress is not limited to low-income suburbs and is now affecting many in affluent areas.
He estimates that as many as 318,000 households are now suffering from severe stress, up 19% on the previous month, while 465,000 have mild stress, up 7%.
"The fact is people are hurting and they are hurting really badly as they try to square a circle which is getting harder and harder," Mr North said.
"This is going to have a dampening effect on the overall economy."
The new figures were released as the Australian Bureau of Statistics revealed that household wealth fell by 15%, or $7500 per person, in the three months to March and the debt-to-asset ratio surged to a record 138%.
"The ratio shows that households do not have sufficient readily liquid assets to cover outstanding debt, highlighting a degree of vulnerability to an economic downturn," said Craig James, CommSec's chief equities economist.
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Mr North, who developed the "Stress-o-Meter" and produces an authoritative biannual report on the home-loan market, said mortgage stress is not limited to low-income suburbs and is now affecting many in affluent areas.
He estimates that as many as 318,000 households are now suffering from severe stress, up 19% on the previous month, while 465,000 have mild stress, up 7%.
"The fact is people are hurting and they are hurting really badly as they try to square a circle which is getting harder and harder," Mr North said.
"This is going to have a dampening effect on the overall economy."
The new figures were released as the Australian Bureau of Statistics revealed that household wealth fell by 15%, or $7500 per person, in the three months to March and the debt-to-asset ratio surged to a record 138%.
"The ratio shows that households do not have sufficient readily liquid assets to cover outstanding debt, highlighting a degree of vulnerability to an economic downturn," said Craig James, CommSec's chief equities economist.
Click here for full story
FOOTNOTE: Get yourself pre-approved for a home loan in just 60 seconds using My Home Loan Approvals exclusive software. It’s FREE, FAST and it can be ANONYMOUS. Be sure to check out the fantastic range of Home Loan Calculators. Answer those questions:- “How much can I borrow” and “What will my repayments be”. Fast Home Loan approvals are possible even home loans for people with bad credit.