We have a personal credit crisis and not housing crisis

In recent years, we've seen a significant rise in personal debt while personal savings is on the decline, which has led many to argue that we are currently facing a personal credit crisis, not a housing crisis. While the housing market has certainly had its ups and downs, the true root of our financial struggles lies in the increase in personal debt.

Credit card debt, student loan debt, and medical debt are just a few examples of the types of debt that have skyrocketed in recent years. These forms of debt affect individuals on a personal level, putting a strain on their finances and making it difficult for them to make ends meet.

The rise in personal debt can be attributed to a number of factors. For one, the cost of living has increased, coupled with the inflation, making it harder for people to make ends meet. Additionally, the ease of obtaining credit has led many to take on more debt than they can realistically manage.

The consequences of a personal credit crisis can be severe. High levels of debt can lead to financial stress and decreased overall well-being. It can also make it difficult to access credit when it is needed, as a poor credit score can prevent individuals from getting approved for loans, mortgages, and other forms of credit.

So, what can be done to address the personal credit crisis? Firstly, individuals need to be proactive in managing their debt. This can include creating a budget, paying off debt as quickly as possible, and avoiding taking on new debt if possible. Second, with the record high equity levels people can tap into that equity and leverage that high rate debt. Getting HELOCs or second mortgages are the best way to do that.

In conclusion, while the housing market may experience its ups and downs, the true financial crisis we are facing is one of personal debt. It is nothing like what we have seen in 2008. By taking steps to address the root cause of the problem and helping individuals manage their debt more effectively, we can work towards a more financially stable future.

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