The US housing market is under renewed pressure. Rising interest rates, high living costs, and stagnant real wages are pushing more and more households into financial distress. At the same time, credit card debt in the US is reaching new record highs. This combination is explosive – not only for private households, but also for banks and the entire financial system.

Rising payment defaults on real estate loans

After years of extremely low interest rates, the US Federal Reserve has significantly raised its key interest rate. For many homeowners, especially those with variable-rate loans or refinancing, monthly payments are rising noticeably. Already, there are signs of increasing mortgage defaults, particularly in the commercial real estate sector and among lower-income households.

Commercial real estate – especially office space – is also burdened by structural changes. Working from home, vacancies, and declining demand are driving down prices. Loans granted during boom times are suddenly on shaky ground. For banks, this means increased risks on their loan portfolios.

Credit card debt at a historic high

Parallel to the housing crisis, credit card debt among US consumers is exploding. Many households are increasingly financing everyday expenses with credit cards, as savings are lacking and inflation has eroded purchasing power. Interest rates on credit cards are often in the double digits or even over 20 percent – a debt trap for millions of people.

When consumers can no longer pay their credit card bills, default rates rise. This puts banks under double pressure: firstly, from mortgage risks, and secondly, from consumer loans. This development reminds many observers of early warning signs of previous financial crises.

Banks between interest rate turnaround and risk explosion

The banking system benefits in the short term from higher interest rates, as interest margins expand. However, in the long term, loan defaults increase. At the same time, bonds on bank balance sheets lose value, which puts pressure on equity ratios. The combination of valuation losses and rising defaults can lead to a dangerous downward spiral – especially for regional banks with a strong focus on real estate financing.

Systemic risks to the financial markets

In a highly interconnected financial system, such developments are not limited to the US. International investors, funds, and insurance companies have significant exposure to the US market . A broader crisis of confidence could lead to sell-offs in the stock and bond markets, increased volatility, and liquidity shortages.

Conclusion: Precious metals as protection against systemic risks

In times of increasing uncertainty, tangible assets gain in importance. Gold and silver have been considered a hedge against financial crises, inflation, and a loss of confidence in the banking system for centuries. While loans can default, precious metals are not a debt. Silver also benefits from its industrial demand in future-oriented sectors. For investors with a long-term perspective, adding physical precious metals to their portfolio can be a sensible way to stabilize their assets.