Financial Optimism Heading into 2014
It is around this time of the year – Thanksgiving, Christmas, New Year’s and other holidays – that people start reevaluating their lives. Am I doing ok? Do I have enough money coming in? Is my family taken care of? Are my dreams being realized? Questions like that bounce back and forth through our heads in the months of November, December and January. For many Canadians, these questions have been put on hold due to an unreliable economy and unfavorable conditions for growth. Thankfully, things are improving, such as the real estate market, and people are taking out mortgages for their dream homes.
This is, of course, a great sign and many analysts predict that 2014 will be a very strong year for Canadian real estate, but with such great news, you know that some bad news will percolate in. This news deals with non-mortgage debt. Non-mortgage debt of Canadians will, if all indications are true, will break records and hit an all-time high. In the article, “Consumer debt predicted to hit record in 2014,” The Canadian Press reports, “In its first such annual forecast, TransUnion predicts the average consumer’s total non-mortgage debt will hit an all-time high of $28,853 by the end of 2014. That would be about $1,100 more than the $27,743 of debt consumers are expected to have at the end of this year.”
That is certainly an increase! This increase is attributed to car loans, credit card debt, lines of credit, student loans and more. While this may seem like bad news, forcing many to say, “Everyone, get your credit in check,” it’s not all bad news, as loan delinquency rates are expected to decline, which means that people are making regular payments. When delinquency rates are down, it suggests that people are ready for bigger moves in life, such as purchasing a home.
At River City Financial, it is encouraging to see that delinquency rates are expected to go down, especially heading into 2014. While the consumer debt situation is distressing, we believe that 2014 will be a huge year when it comes to big life moves for Canadians. It is a great feeling to have this holiday season and we encourage everyone to embrace optimism!