How Much Debt Does the Average American Have?
It is common knowledge that most Americans have average credit card debt ranging anywhere from $7,000 to $9,000 dollars. This is due to the rising costs of fuel prices, food prices, and mortgage payments in the United States.
Fuel prices are, according to the NBC Nightly News broadcast, now at a national average of $3.87 per gallon. In the major American city of Chicago alone, the average citywide cost of gas is $4.22. This demonstrates that gas prices may be being gouged by the oil companies. According to one CNN broadcast, the Exxon Mobile oil company is making 60% more in profits this year than last year. This may be due to the fact that gas stations may be rising the prices of gas unnecessarily during this time while oil has gone from $70 and $80 dollars per barrel to rise up to $100 and more per barrel.
Food prices have also risen. People are having more difficulty providing healthy, well-balanced meals for their families. Since starchy foods like pastas, spaghetti, and macaroni mixes are relatively cheap to buy, many Americans are opting to buy these types of foods rather than fruits, vegetables, meat, and dairy products. While these former options are not as healthy as their latter counterparts, price is a major factor which has made Americans rethink their meal-planning options. While money is scarce in a bad economy, many people are trying to cut corners in order to save as much money as they can for other expenses.
Speaking of expenses, mortgage payments for some people have creeped higher, especially if their mortgages are step mortgages with increased balances due. At the end of every month, there are people who are scraping together all of the revenue they can summon in order to make mortgage payments so they can stay in their houses. Meanwhile, property values continue to plummet. This means that sometimes mortgages are actually "underwater"--meaning the property value is less than the entire mortgage is worth. Due to several lenders which gave out bad mortgage loans to underqualified or unqualified applicants, many applicants for home loans did not know how to pay off a mortgage or how they were going to get enough money to pay for their mortgage. This resulted in a plethora of mortgages being defaulted upon once the owners couldn't make the payments. Also, some people chose to do "walk-offs," meaning that they walked away from a home on which they couldn't pay the mortgage--at which point the bank repossessed the home and sold to a buyer on the condition that the house would be a short sale. A short sale is basically a home sale that is defined as a home in distress because the previous owner defaulted on the mortgage or for whatever reason could not continue to pay the mortgage--and then the bank took over the possession of the home. Should the home be sold to a prospective buyer, the buyer will be informed that the home is a short sale, which could take months to close on a deal--longer than normal for a real estate deal to take place. In addition, a short sale also must be approved by the bank--and, in some cases, the buyer as well, depending upon who has say in the sale.
Overall, Americans are pressed with money crunches on several fronts, but especially when it comes to paying the current prices of fuel, food, and mortgage payments now due.
The SIS Center
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