Consumer Checkpoint

October 2022

Home and away

Key takeaways

  • Bank of America internal data suggests the housing market is slowing. Escrow and title payments – used for deposits ahead of house sales – have been declining for most of 2022.
  • The slowdown may partially reflect high valuations and surging mortgage rates, which are weighing on affordability – in September median mortgage payments for Bank of America customers rose 8.8% year-over-year (YoY). Households looking to rent instead of buy are also facing rising costs, with the median rent up 8.1% YoY in September.
  • This could translate into a squeeze on discretionary spending particularly for renters, who are typically younger and earn lower income – furniture spending is already significantly weaker. By contrast, homeowners appear to be planning to spend more on home improvements, providing some offset.
  • Overall spending is faring better than the housing sector. Bank of America data shows after-tax payroll wage growth of 5.5% YoY is still outpacing growth in total card spending per household, which is up 4.4% YoY in September. The caveat is that card spending per household moderated for the fifth month, partially due to Hurricane Ian. Meanwhile total payments are strong, rising 10% YoY in September. Within this, overall total credit and debit card spend, which makes up over 20% of total payments, was also up 9% YoY.

Read our full analysis for a more in-depth look at these trends.

Consumer Checkpoint is a regular publication from Bank of America Institute. It aims to provide a holistic and real-time estimate of U.S. consumers’ spending and their financial well-being, leveraging the depth and breadth of Bank of America proprietary data. Any such Bank of America proprietary data is not intended to be reflective or indicative of, and should not be relied upon as, the results of operations, financial conditions or performance of Bank of America.