by Calculated Risk on 12/22/2006 02:45:00 PM

The Federal Reserve released the "Household Debt Service and Financial Obligations Ratios" for Q3 2006 today.

DEFINITIONS: The household debt service ratio (DSR) is an estimate of the ratio of debt payments to disposable personal income. Debt payments consist of the estimated required payments on outstanding mortgage and consumer debt.

The financial obligations ratio (FOR) adds automobile lease payments, rental payments on tenant-occupied property, homeowners' insurance, and property tax payments to the debt service ratio.

The owner FOR (Financial Obligation Ratio) was 18.16% in Q3 '06, off slightly from the revised 18.17% for Q2 '06 (Q2 was originally reported at 18.06%)

The mortgage portion of the FOR set a new record at 11.68%, up slightly from 11.65% in Q2 '06. (Q2 was originally 11.60%)

The household DSR (Debt Service ratio) was off slightly at 14.49%, from 14.51% in Q2 '06. (Q2 was originally 14.40%)

Note: All of the estimates for Q2 were revised upwards, otherwise these would have been new records across the board.

Click on graph for larger image.

With relatively low mortgage rates, one might expect the mortgage portion of the FOR to be lower than previous periods, not at record high levels.

Note that the previous housing bubble peaked with the mortgage portion of the FOR at 10.38%.