Traditional savings and checking account balances in the U.S. have stagnated, yet American consumer spending remains strong. Research shows many households are reallocating funds to higher yield options like money market funds and CDs. This shift indicates that despite the apparent financial strain reflected in bank balances, total cash reserves have increased by 3% to 5% year over year as of May 2025. Consequently, potential homebuyers may have more financial flexibility than data from traditional banking suggests, which may positively affect the housing market.
"Balances of traditional savings and checking accounts have stagnated, but Americans are continuing to spend at surprising levels. This disconnect has puzzled economists."
"New research from the JPMorganChase Institute suggests that Americans aren't necessarily out of cash-they're just parking it somewhere else, shifting funds into higher-yield vehicles."
"It's a reshuffling that could have big implications for the housing market. While down payment affordability is a hurdle, many potential buyers might have more flexibility than traditional data suggests."
"Total cash reserves were up 3% to 5% year over year as of May 2025, signaling a return to positive growth despite low traditional bank balances."
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