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Posts Tagged ‘Unsecured Lending’

Increasing debt among young people adds to concerns over debt levels

We have reported frequently in our blogs about concerns over rising debt levels among UK households. We previously noted the concerns expressed in July 2014 by the Prudential Regulation Authority (PRA) that the growth in consumer credit (unsecured lending) was stretching the financial well-being of individuals with implications for the resilience of lenders’ credit portfolios. Now the Chief Executive of the Financial Conduct Authority (FCA), Andrew Bailey, in an interview to the BBC has identified the growing problem of debt among young people.

In his interview Mr Bailey stresses that the growth in debt amongst younger people is not ‘reckless borrowing’ and so not borne out of a lack of willpower or ‘present bias’ (see John’s blog Nudging mainstream economists). Rather, it is borrowing simply to meet basic living costs.

In his interview Mr Bailey goes on to identify generational shifts in patterns of wealth and debt. He notes:

There are particular concentrations [of debt] in society, and those concentrations are particularly exposed to some of the forms and practices of high cost debt which we are currently looking at very closely because there are things in there that we don’t like.

There has been a clear shift in the generational pattern of wealth and income, and that translates into a greater indebtedness at a younger age. That reflects lower levels of real income, lower levels of asset ownership. There are quite different generational experiences.

Mr Bailey goes on to echo concerns expressed back in July by the Prudential Regulation Authority in relation to the growth in consumer credit. The chart illustrates the scale of the accumulation of consumer credit (unsecured lending) across all individuals in the UK. In August 2017 the stock of unsecured debt rose to £203 billion, the highest level since December 2008 when the financial crisis was unfolding. (Click here to download a PowerPoint of the chart).

In concluding his BBC interview, Mr Bailey notes that credit should be available to younger people. Credit helps individuals to ‘smooth income’ and that this is something which is increasingly important with more people having erratic incomes as the gig-economy continues to grow. However, he notes that credit provision needs to be “sustainable”.

BBC Interview
Financial regulator warns of growing debt among young people BBC News (16/10/17)

Articles
Young people are borrowing to cover basic living costs, warns City watchdog Guardian, Julia Kollewe (16/10/17)
Britain’s debt time​bomb: FCA urges action over £200bn crisis Guardian, Phillip Inman and Jill Treanor (18/9/17)
FCA warning that young are borrowing to eat shames Britain Independent, James Moore (16/7/17)
Young people are ‘borrowing to cover basic living costs’ and increasing numbers are going bankrupt, warns financial watchdog Daily Mail, Kate Ferguson (6/10/17)
More and more young people are falling into debt – but it’s not their fault Metro, Alex Simpson (20/10/17)

Data
Bankstats (Monetary and Financial Statistics) – Latest Tables Bank of England
Statistical Interactive Database Bank of England

Questions

  1. What does it mean if people are financially distressed?
  2. What do you think Mr Bailey means by ‘sustainable credit’?
  3. In what ways might levels of debt impact on the macroeconomy?
  4. How does credit help to smooth spending patterns? Why might this be more important with the growth in the gig-economy?
  5. What is meant by inter-generational fairness?
  6. Of what relevance are changing patterns in wealth and debt to inter-generational fairness? What factors might be driving these patterns?
  7. What sort of credit is unsecured credit? How does it differ from secured credit?
  8. Are there measures that policymakers can take to reduce the likelihood that flows of credit become too excessive?
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Increasing stress over financial distress

An economy that becomes dependent on credit can, in turn, become acutely volatile. Too much credit and there exists the potential for financial distress which can result in an economic slowdown as people cut back on spending. Too little credit and the growth in aggregate demand is subdued. Some argue that this is what now faces a financialised economy like the UK. Even it this overstates the significance of credit, there is no doubt that UK credit data is keenly followed by economists and policymakers.

Recent rates of credit accumulation by individuals have raised concern. In July 2014 the Prudential Regulation Authority (PRA) of the Bank of England issued a statement voicing its concern that the growth in consumer credit, also known as unsecured lending, was stretching the financial well-being of individuals and that the resilience of lenders’ consumer credit portfolios was therefore reducing.

Chart 1 illustrates the scale of the flows of both consumer credit (unsecured lending) and mortgages (secured credit) from banks and building societies to individuals. It shows the amount of credit net of repayments lent over the last 12 months. In the 12 months to July 2017 the net accumulation of consumer credit was £18.2 billion while that of secured borrowing was £40.8 billion. Although the 12-month level of consumer credit accumulation was down from its recent peak of £19.2 billion in November 2016, total net lending (including secured lending) to individuals of £59.0 billion was its highest since September 2008. (Click here to download a PowerPoint of the chart).

To help put in context the size of flows of net lending Chart 2 shows the annual flows of consumer credit and secured debt as percentages of GDP. In this case each observation measures net lending over the past four quarters as a percentage of annual GDP. The latest observation is for 2017 Q2 and shows that the annual net flow of consumer credit was equivalent to 0.94 per cent of GDP while that for secured borrowing was 1.78 per cent of GDP. While the flows of consumer credit and secured borrowing as shares of national income have eased a little from their values in the second half of last year, they have not eased significantly. (Click here to download a PowerPoint of the chart).

Despite the recent strength of borrowing, levels are nothing like those seen in the mid 2000s. Nonetheless, we need to see the current accumulation of debt in the context of two important factors: debt already accumulated and the future macroeconomic environment. Chart 3 gives some insight to the first of these two by looking at stocks of debt outstanding as shares of GDP. The total debt-to-GDP ratio peaked 90 percent in 2009 before relatively slower growth in credit accumulation saw the ratio fall back. The ratio has now been at or around the 78 per cent level consistently for the past two or so years. (Click here to download a PowerPoint of the chart).

The ratio of the stock of consumer debt to GDP peaked in 2008 at 13.3 per cent. It too fell back reaching 9.05 per cent in the middle of 2014. Since that time the ratio has been rising and by the end of the second quarter of this year was 10.1 per cent. The PRA appears not only to be concerned by this but also the likely unwinding of what it describes as the ‘current benign macroeconomic environment and historically low arrears rates’.

Going forward, we might expect to see ever closer scrutiny not only of the aggregate indicators referred to here but of an array of credit indicators. The PRA statement, for example, refers to the number of , ‘0% interest credit card offers’, falling interest rates on unsecured personal loans and the growth of motor finance loans. The hope is that we can avoid the costs of financial distress that so starkly affected the economy in the late 2000s and that continue to cast a shadow over today’s economic prospects.

PRA Statement
PRA Statement on Consumer Credit PRA, Bank of England (4/7/14)

Articles
Bank of England demands consumer credit vigilance; construction growth slows – as it happened Guardian (4/7/14)
Bank of England warns more defences may be needed against consumer credit Telegraph (24/7/17)
Beware the bubble: Bank of England clamps down on credit Telegraph, Tim Wallace (1/7/17)
Bank of England raises capital requirements on UK lenders amid concerns about excessive consumer borrowing Independent, Ben Chu (27/6/17)
Bank of England tightens mortgage borrowing rules amid fears of debt boom Express, Lana Clements (27/6/17)
Rise in personal loans dangerous, Bank of England official says BBC News (25/7/17)
Bank of England takes action over bad loans BBC News (27/6/17)

Data
Bankstats (Monetary and Financial Statistics) – Latest Tables Bank of England
Statistical Interactive Database Bank of England

Questions

  1. What does it mean if people are financially distressed? What responses might people take in response to this distress?
  2. How can financial distress affect the economy’s growth path?
  3. How would you measure the financial well-being of an individual? What about the financial well-being of firms?
  4. What role mights banks play in affecting levels of financial distress in the economy?
  5. What does it mean if credit conditions are pro-cyclical?
  6. Why might banks’ lending be pro-cyclical?
  7. Are there measures that policymakers can take to reduce the likelihood that flows of credit become too excessive?
  8. Why do some economists refer to the economic downturn of the late 2000s as a balance sheet recession? How likely is another balance sheet recession in the short term? What about in the longer term?
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No exit for credit as annual credit flows to individuals remain at £58 billion

We have frequently looked at patterns in lending by financial institutions in our blogs given that many economies, like the UK, display cycles in credit. Central banks now pay considerable attention to the possibility of such cycles destabilising economies and causing financial distress to people and businesses. There is also increased interest here in the UK in bank lending data in light of Brexit. Patterns in credit flows may indicate whether it is affecting the lending choices of financial institutions and borrowing choices of people and businesses.

Data from the Bank of England’s Money and Credit – September 2016 statistical release shows net lending (lending net of repayments) by monetary financial institutions (MFIs) to individuals in September 2016 was £4.65 billion. This compares with £8.89 billion back in March 2016 which then was the highest monthly total since August 2007. However, the March figure was something of a spike in lending and this September’s figure is actually very slightly above the monthly average over the last 12 months, excluding March, of £4.5 billion. In other words, as yet, there is no discernible change in the pattern of credit flows post-Brexit.

Leaving aside the question of the economic impact of Brexit, we still need to consider what the credit data mean for financial stability and for our financial well-being. Chart 1 shows the annual flows of lending by banks and building societies since the mid 1990s. The chart evidences the cycles in secured lending and in consumer credit (unsecured lending) with its consequent implications for economic and financial-welling being.(Click here to download a PowerPoint of Chart 1.)

After the financial crisis, as Chart 1 shows, net lending to individuals collapsed. More recently, net lending has been on the rise both through secured lending and in consumer credit. The latest data show that annual flows have begun to plateau. Nonetheless, the total flow of credit in the 12 months to September of £58 billion compares with £33 billion and £41 billion in the 12 months to September 2014 and 2015 respectively. Having said this, in the 12 months to September 2007 the figure was £112 billion! £58 billion is currently equivalent to around about 3 per cent of GDP.

To more readily see the effect of the credit flows on debts stocks, Chart 2 shows the annual growth rate of net lending by MFIs. In essence, this mirrors the growth rate in the stocks of debt which is an important metric of financial well-being. The chart nicely captures the pick up in the growth of lending from around the start of 2013. What is particularly noticeable is the very strong rates of growth in net unsecured lending from MFIs. The growth of unsecured lending remains above 10 per cent, comparable with rates in the mid 2000s. (Click here to download a PowerPoint of Chart 2.)

The growth in debt stocks arising from lending continues to demonstrate the need for individuals to be mindful of their financial well-being. This caution is perhaps more important given the current economics uncertainties. The role of the Financial Policy Committee in the UK is to monitor the financial well-being of economic agents in the context of ensuring the resilience of the financial system. It therefore analyses the data on credit flows and debt stocks referred to in this blog along with other relevant metrics. At this moment its stance is not to apply any additional buffer – known as the Countercyclical Capital Buffer – on a financial institution’s exposures in the UK over and above internationally agreed standards. Regardless, the fact that it explicitly monitors financial well-being and risk shows just how significant the relationship between the financial system and economic outcomes is now regarded.

Articles
Higher inflation and rising debt threaten millions in UK The Guardian, Angela Monaghan (5/11/16)
Consumer spending has saved the economy in the past – but we cannot bet on it forever Sunday Express, Geff Ho (13/11/16)
Warning as household debts rise to top £1.5 trillion BBC News, Hannah Richardson (7/11/16)
Household debt hits record high – How to get back on track if you’re in the red Mirror, Graham Hiscott (7/12/16)

Data
Money and Credit – September 2016 Bank of England
Bankstats (Monetary and Financial Statistics) – Latest Tables Bank of England
Statistical Interactive Database Bank of England

Questions

  1. Explain the difference between secured debt and unsecured debt.
  2. What does it mean if individuals are financially distressed?
  3. How would we measure the financial well-being of individuals and households?
  4. What actions might individuals take it they are financially distressed? What might the economic consequences be?
  5. How might uncertainty, such as that following the UK vote to leave the European Union, affect spending and savings’ decisions by households?
  6. What measures can institutions, like the UK’s Financial Policy Committee, take to reduce the likelihood that flows of credit become too excessive?
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Are households ravenous for credit?

In April we asked how sustainable is the UK’s appetite for credit? Data in the latest Bank of England’s Money and Credit publication suggest that such concerns are likely grow. It shows net lending (lending net of repayments) by monetary financial institutions (MFIs) to individuals in March 2016 was £9.3 billion, the highest monthly total since August 2007. This took net borrowing over the previous 12 months to £58.6 billion, the highest 12-month figure since September 2008.

The latest credit data raise fears about the impact on the financial well-being of individuals. The financial well-being of people, companies, banks and governments can have dramatic effects on economic activity. These were demonstrated vividly in the late 2000s when a downturn resulted from attempts by economic agents to improve their financial well-being. Retrenchment led to recession. Given the understandable concerns about financial distress we revisit our April blog.

Chart 1 shows the annual flow of lending extended to individuals, net of repayments. (Click here to download a PowerPoint of Chart 1.) The chart provides evidence of cycles both in secured lending and in consumer credit (unsecured lending).

The growth in net lending during the 2000s was stark as was the subsequent squeeze on lending that followed. During 2004, for example, annual net flows of lending from MFIs to individuals exceeded £130 billion, the equivalent of close on 10.5 per cent of annual GDP. Secured lending was buoyed by strong house price growth with UK house price inflation rising above 14 per cent. Nonetheless, consumer credit was very strong too equivalent to 1.8 per cent of GDP.

Net lending collapsed following the financial crisis. In the 12 months to March 2011 the flow of net lending amounted to just £3.56 billion, a mere 0.2 per cent of annual GDP. Furthermore, net consumer credit was now negative. In other words, repayments were exceeding new sums being extended by MFIs.

Clearly, as Chart 1 shows, net lending to individuals is again on the rise. This partly reflects a rebound in sections of the UK housing market. Net secured lending in March was £7.435 billion, the highest monthly figure since November 2007. Over the past 12 months net secured lending has amounted to £42.1 billion, the highest 12-month figure since October 2008.

Yet the growth of unsecured credit has been even more spectacular. In March net consumer credit was £1.88 billion (excluding debt extended by the Student Loans Company). This is the highest month figure since March 2005. It has taken the amount of net consumer credit extended to individuals over the past 12 months to £16.435 billion, the highest figure since December 2005.

Chart 2 shows the annual growth rate of both forms of net lending by MFIs. In essence, this mirrors the growth rate in the stocks of debt – though changes in debt stocks can also be affected by the writing off of debts. The chart captures the very strong rates of growth in net unsecured lending from MFIs. We are now witnessing the strongest annual rate of growth in consumer credit since November 2005. (Click here to download a PowerPoint of the chart.)

The growth in household borrowing, especially that in consumer credit, evidences the need for individuals to be mindful of their financial well-being. Given that these patterns are now becoming well-established you can expect to see considerable comment in the months ahead about our appetite for credit. Can such an appetite for borrowing be sustained without triggering a further balance sheet recession as experienced at the end of the 2000s?

Articles
Consumer credit rises at fastest pace for 11 years The Guardian, Hilary Osborne (29/4/16)
Debt bubble fears increase as consumer credit soars to 11-year high The Telegraph, Szu Ping Chan (29/4/16)
Fears of households over-stretching on borrowing as consumer credit grows The Scotsman, (29/4/16)
History repeating? Fears of another financial crisis as borrowing reaches 11-year high Sunday Express, Lana Clements (29/4/16)
The chart that shows we put more on our credit cards in March than in any month in 11 years Independent, Ben Chu (1/4/16)
Britain’s free market economy isn’t working The Guardian (13/1/16)

Data
Money and Credit – March 2016 Bank of England
Bankstats (Monetary and Financial Statistics) – Latest Tables Bank of England
Statistical Interactive Database Bank of England

Questions

  1. What does it mean if individuals are financially distressed?
  2. How would we measure the financial well-being of individuals and households?
  3. What actions might individuals take it they are financially distressed? What might the economic consequences be?
  4. How might uncertainty affect spending and saving by households?
  5. What measures can policymakers take to reduce the likelihood that flows of credit become too excessive?
  6. What is meant by a balance sheet recession?
  7. Explain the difference between secured debt and unsecured debt.
  8. Should we be more concerned about the growth of consumer credit than secured debt?
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How sustainable is the UK’s appetite for credit?

The latest Bank of England’s Money and Credit release shows net lending (lending net of repayments) by Monetary Financial Institutions (MFIs) to individuals in February was £4.9 billion. Although down on the £5.4 billion in January, it nonetheless means that over the last 12 months the flow of net lending amounted to £52.8 billion. This is the highest 12-month figure since October 2008.

The latest credit data raise concerns about levels of lending and their potential to again impact on the financial well-being of individuals, particularly in light of the falling proportion of income that households are saving. As we saw in UK growth fuelled by consumption as households again lose affection for their piggy banks the saving ratio fell to an historic low of 4.2 per cent for 2015.

An important factor affecting the financial well-being of individuals and households is the extent of their indebtedness. Flows of credit accumulate to become stocks of debt. Stocks of debt affect the extent to which household incomes becomes prey to debt servicing costs. Put simply, more and more income, all other things being equal, is needed for interest payments and capital repayments as debt stocks rise. Rising stocks of debt can also affect the ability of people to further fund borrowing, particularly if debt levels grow more quickly than asset values, such as the value of financial assets accumulated through saving. Consequently, the growth of debt can result in households incurring what is called balance sheet congestion with deteriorating financial well-being or increased financial stretch.

Chart 1 shows the stocks of debt acquired by individuals from MFIs, i.e. deposit-taking financial institutions. It shows both secured debt stocks (mortgage debt) and unsecured debt stocks (consumer credit). The scale of debt accumulation, particularly from the mid 1990s up to the financial crisis of the late 2000s is stark.

At the start of 1995 UK individuals had debts to MFIs of a little over £430 billion, the equivalent of roughly 55 per cent of annual GDP (Gross Domestic Product). By the autumn of 2008 this had hit £1.39 trillion, the equivalent of roughly 90 per cent of annual GDP. At both points around 85 per cent of the debt was secured debt, though around the start of the decade it had fallen back a little to around 80 per cent. (Click here to download a PowerPoint of Chart 1.)

The path of debt at the start of the 2010s is consistent with a story of consolidation. Both financially-distressed individuals and MFIs took steps to repair their balance sheets following the financial crisis. These steps, it is argued, are what resulted in a balance sheet recession. This saw the demand for and supply of additional credit wane. Consequently, as Chart 1 shows debt accumulation largely ceased.

More recently the indebtedness to MFIs of individuals has started to rise again. At the end of February 2014 the stock of debt was just shy of £1.4 trillion. By the end of February 2016 it had risen to £1.47 trillion (a little under 80 per cent of annual GDP). This is an increase of 4.7 per cent. Interestingly, the rise was largely driven by unsecured debt. It rose by 13.4 per cent from £159.4 billion to £180.7 billion. Despite the renewed buoyancy of the housing market, particularly in South East England, the stock of secured debt has risen by just 3.6 per cent from £1.24 trillion to £1.28 trillion.

Chart 2 shows the annual flow of lending extended to individuals, net of repayments. (Click here to download a PowerPoint of Chart 2.) The chart provides evidence of cycles both in secured lending and in consumer credit (unsecured lending).

The growth in net lending during the 2000s was stark as was the subsequent squeeze on lending that followed. During 2004, for example, annual net flows of lending from MFIs to individuals exceeded £130 billion, the equivalent of close on 10.5 per cent of annual GDP. Secured lending was buoyed by strong house price growth with UK house price inflation rising above 14 per cent. Nonetheless, consumer credit was very strong too equivalent to 1.8 per cent of GDP.

Net lending collapsed following the financial crisis. In the 12 months to March 2011 the flow of net lending amounted to just £3.56 billion, a mere 0.2 per cent of annual GDP. Furthermore, net consumer credit was now negative. In other words, repayments were exceeding new sums being extended by MFIs.

Clearly, as Chart 2 shows, we can see that net lending to individuals is again on the rise. As we noted earlier, part of this this reflects a rebound in parts of the UK housing market. It is perhaps worth noting that secured lending helps individuals to purchase housing and thereby acquire physical wealth. While secured lending can find its way to fuelling spending, for example, through the purchase of goods and services when people move into a new home, consumer credit more directly fuels spending and so aggregate demand. Furthermore, consumer credit is not matched on the balance sheets by an asset in the same way that secured credit is.

Chart 3 shows the annual growth rate of both forms of net lending by MFIs. In essence, this mirrors the growth rate in the stocks of debt though changes in the stocks of debt can also be affected by the writing off of debts. What the chart nicely shows is the strong rates of growth in net unsecured lending from MFIs. In fact, it is the strongest annual rate of growth since January 2006 (Click here to download a PowerPoint of the chart.)

The growth in consumer credit, the fall in the saving ratio and the growth in consumer spending point to a need for individuals to be mindful of their financial well-being. What is for sure, is that you can expect to see considerable comment in the months ahead about consumption, credit and income data. Fundamental to these discussions will be the sustainability of current lending patterns.

Articles
Consumer Lending Growth Highest Since 2005 Sky News, (31/3/16)
Britons raid savings to fund spending as economists warn recovery ‘built on sand’ Telegraph, Szu Ping Chan (31/3/16)
Household debt binge has no end in sight, says OBR Telegraph, Szu Ping Chan (17/3/16)
Surge in borrowing… as savings dwindle: Household savings are at an all-time low as families turn to cheap loans and credit cards Daily Mail, James Burton (1/4/16)
George Osborne banks on household debt time bomb to meet his Budget targets Mirror, Ben Glaze (29/3/16)
Britain’s free market economy isn’t working Guardian (13/1/16)

Data
Bankstats (Monetary and Financial Statistics) – Latest Tables Bank of England
Statistical Interactive Database Bank of England

Questions

  1. What does it mean if individuals are financially distressed?
  2. How would we measure the financial well-being of individuals and households?
  3. What actions might individuals take it they are financially distressed? What might the economic consequences be?
  4. How might uncertainty affect spending and saving by households?
  5. What measures can policymakers take to reduce the likelihood that flows of credit become too excessive?
  6. What is meant by a balance sheet recession?
  7. Explain the difference between secured debt and unsecured debt.
  8. Should we be more concerned about the growth of consumer credit than secured debt?
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Consumers lose appetite for HEW

We have learnt a lot this week about the appetite of households for spending. And, it appears that they are not particularly hungry. On Monday, the Quarterly National Accounts for Q1 revealed that, in real terms, household sector spending fell by 0.1% in the quarter despite disposable income growing by 2.1%. Today, we have learnt that households have continued to increase the amount of equity in their homes. The Housing Equity Withdrawal (HEW) figures for Q1 show that households increased their stake in housing by some £3.2 billion.

Housing Equity Withdrawal occurs when lending secured on dwellings increases by more than the investment in the housing stock. Housing investment relates largely to the purchase of brand new homes and to major home improvements, but also includes housing moving costs such as legal fees. What the Bank of England does is to compare these levels of housing investment with the amount of additional secured lending. If the Bank of England finds that additional secured lending is equal to the amount of housing investment then HEW is zero. If it is positive, then additional secured lending is greater than the levels of housing investment. This would show that the household sector was extracting equity from the housing stock and using mortgage lending to fund consumption, to purchase financial assets or to pay off unsecured debts, like credit cards.

But, the point here is that HEW is actually negative and has been so since the second quarter of 2008. Negative HEW means that housing investment levels are greater than the levels of new secured borrowing. In other words, household are increasing their housing equity. But, there is a cost to this choice because by doing so households are using money that could otherwise be assigned for spending or purchasing financial assets. One way of measuring the potential extent of foregone consumption is to note that the Bank estimates that the level of equity injected into housing in Q1 was equivalent to 1.3% of disposable income. Since Q2 2008 households have injected equity into housing to the tune of £38.34 billion, which is equivalent to 1.97% of disposable income, some of which might have otherwise been used to fund spending.

The negativity of HEW is not that surprising. In difficult economic times many of us might be tempted, if we can, to reduce our exposure to debt. Low interest rates may also be inducing households to pay off debt either because the interest rates on saving products are low and unattractive or because the size of mortgage payments for those on now lower variable rate mortgages gives them income with which to pay debt off. The bottom line is that after many years happily spending, households appear to be dining off a different menu.

Articles
Homeowners raise stakes in homes, says Bank of England BBC News (15/7/10)
Mortgage debt drops £3.2 billion Independent, Nicky Burridge (15/7/10)
Drop in outstanding mortgage debt UK Press Association (15/7/10)
Equity withdrawal still negative Financial Times, Cara Waters (15/7/10)
Saving may cause a double-dip recession Telegraph, Harry Wallop (13/7/10)

Data
Housing equity withdrawal (HEW) statistical releases Bank of England
Quarterly National Accounts, 1st Quarter 2010 ONS

Questions

  1. What do you understand by the term ‘housing equity withdrawal’?
  2. Compare the possible implications for consumer spending of positive HEW and negative HEW.
  3. What factors do you think lie behind the eight consecutive quarters of negative HEW?
  4. Why might a low interest rate environment affect the incentive to withdrawal housing equity? What other variables might also affect levels of HEW?
  5. How does HEW affect the net worth of households?
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