October 2024
Consumer Checkpoint: Will home equity make spending more durable?
Wage growth and home equity offer support to consumer spending, though there is less demand for higher-priced durable goods.
Key takeaways
- The consumer continues to show modest forward momentum. Bank of America aggregated credit and debit card spending per household fell 0.9% year-over-year (YoY) in September compared to the 0.9% rise in August. Seasonally adjusted spending rose 0.6% month-over-month (MoM).
- Homeowners currently have a historically large share of equity in their homes, providing potential upside to spending if they tap this through a home equity line of credit (HELOC). But home equity is not evenly distributed and a significant share of HELOC borrowing appears on our estimates associated with debt consolidation, so the impact on spending should not be exaggerated.
- Durable goods spending has been robust, according to Bureau of Economic Analysis data. However, we find the share of higher-value durable transactions in Bank of America internal data has declined, with a corresponding rise in some services categories. This suggests consumers may be prioritizing value categories and experiences over big-ticket purchases.
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.
