financial obligations ratio incorporates other recurring expenses, such as rents, property taxes, and payments associated with homeowners ’ insurance and auto leases, that might subtract from the uncommitted income available to households. the federal reserve also calculates separate aggregate financial obligations ratios for homeowners and renters. * * * both the debt - service ratio and the financial obligations ratio rose over the 1990s, but that upward trend has not continued in this decade. the debt - service ratio has been hovering close to 13 percent for three years, whereas the financial obligations ratio, after peaking above 18 - 1 / 2 percent in 2002, has moved down to near 18 percent. the recent stability of the aggregate debt - service and financial obligations ratios reflects largely the evolution of the financial situations of homeowners, who owe more than nine - tenths of all household debt. despite average annual mortgage debt growth in excess of 12 percent over the past two years, the financial obligations of homeowners have exhibited little change as a share of their income because mortgage rates have remained at historically low levels. the enormous wave of mortgage refinancing, which ended only in the fall of 2003, allowed homeowners both to take advantage of lower rates to reduce their monthly payments and, in many cases, to extract some of the built - up equity in their homes. in the aggregate, the cash flows associated with these two effects seem to have roughly offset each other, leaving the financial obligations ratio little changed. indeed, the surge in cash - out mortgage refinancings likely improved rather than worsened the financial condition of the average homeowner. some of the equity extracted through mortgage refinancing was used to pay down more - expensive, non - tax - deductible consumer debt or to make purchases that would otherwise have been financed by more - expensive and less tax - favored credit. * * * by our calculation, both homeowners and renters have seen an increase in the share of income used to cover credit card payments over the past decade. the federal reserve ’ s survey of consumer finances suggests that renters who have recently purchased homes tend to carry higher levels of nonmortgage debt and, in particular, credit card debt. moreover, credit card debt ratios have been rising among all households because of the use of credit cards for new purposes. the convenience of credit cards has caused homeowners to shift the way they pay for various expenditures to credit card debt. in

related sector, is somewhat rising amid a fall in stock prices in the u. s. and worldwide as well as depreciation of the u. s. dollar. in these circumstances, it should be heeded that further destabilization in the foreign exchange and financial markets at home and abroad would easily exert a negative influence on the economy. on the price front, import prices are turning down due to the u. s. dollar ’ s depreciation against the yen since this spring. domestic wholesale prices are leveling off since a decline in machinery prices and a reduction in electricity charges are offset by the effects of the increase in import prices until recently and the completion of inventory adjustment. meanwhile, consumer prices stay on a gradual downtrend and corporate services prices continue to decline. as for the conditions surrounding price developments, the balance between supply and demand is expected to still keep exerting downward pressure on prices for a while amid persistently weak domestic demand, although the completion of inventory adjustment will support prices to some degree. moreover, factors such as the ongoing technological innovations in machinery, deregulation, and the streamlining of distribution channels will continue to restrain prices. with import prices beginning to turn down, the currently unchanged domestic wholesale prices is likely to edge down again as they are sensitive to import prices. consumer prices are expected to stay on a declining trend for the time being at the current gradual pace. this is because while the slower growth in imports of consumer goods is expected to alleviate the downward pressure on prices to some extent, the faster pace of decline in wages may possibly reinforce the ongoing decline in prices, especially for services prices. as for the financial market, in the short - term money markets, the outstanding balance of the current accounts at the bank of japan is recently moving around 15 trillion yen as the bank continues to provide ample liquidity to the money market. in these circumstances, the overnight call rate continues to move around zero percent. moreover, longer - term interest rates remain steady. yields on long - term government bonds inched down in response to a fall in stock prices and are mainly moving in the range of 1. 2 - 1. 3 percent recently. as for yield spreads between private bonds ( bank bonds and corporate bonds ) and government bonds, the downtrend from the start of this fiscal year has come to a halt since mid - june. stock prices fell through june in line with a decline in u. s. stock prices, but have edged up thereafter