by Calculated Risk on 10/12/2006 03:54:00 PM

The Federal Reserve released the "Household Debt Service and Financial Obligations Ratios" for Q2 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 household DSR (Debt Service ratio) set another record at 14.40%, up from 14.31% in Q1 '06.

The owner FOR (Financial Obligation Ratio) set a new record of 18.06%, up from 17.96% in Q1 '06.

The mortgage portion of the FOR set a new record at 11.60%, up from 11.47% in Q1 '06.

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 just over 10%.