The United States (US) Treasury's Office of Financial Research has reported that lower-income households are increasingly using cryptocurrency gains for mortgages.
Low-income households in high-crypto areas see a 150% rise in mortgage balances. Elevated debt-to-income ratios in these areas raise financial stability concerns. Household debt hits $17.9 trillion in Q3 2024. The United States Treasury's Office of Financial Research has reported that lower-income households are increasingly using cryptocurrency gains for mortgages.
The trend raises concerns about financial stability, as the household's mortgage debt-to-income ratios in these areas seem to exceed the recommended levels. However, delinquency rates in cryptocurrency-exposed areas are quite low, with little or no evidence of near-term financial stress. Experts warn that high leverage levels create risk in an economic downturn or during a cryptocurrency market collapse.
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