ATLANTA — New U.S. consumer credit data from CreditForecast.com, a joint product of Equifax and Moody’s Analytics, projects a rebounding consumer environment along with recovering home and auto markets in 2012. As numbers reflect pre-recession totals, consumers should anticipate steady economic growth in major sectors according to both companies’ data. Among lending sectors, home mortgages continue to see the highest percentage of delinquencies, as delinquency rates in auto, bankcard, and consumer finance are back to pre-recession levels.
“After spending recent years in the financial doldrums, U.S. consumers are poised to make a comeback in 2012,” said Equifax Chief Economist Amy Crews Cutts. “The most promise we have seen has primarily been within the consumer spending and auto financing sector, while the housing market continues to see incremental progress towards gaining traction in the coming months.”
CreditForecast.com Report Highlights:
Households are increasingly reducing their debt, as consumer balances are down $187.8 billion from early 2009 totals. Credit more appropriately matches consumer wealth and income levels today. Increased solicitations for credit cards are being seen, accompanied by a 41 percent increase credit card inquiries since the recession low.
In 2011, the number of new bank credit card accounts hit 10 million for the first time since 2008, and the upward trend is expected to continue into 2012. Consumer optimism may be the cause of these increases as spending continues to maintain healthy increases. Retail sales were up 7.7 percent in 2011, the strongest showing since 1999.
Student lending is rapidly increasing, reflecting the impact of a poor job market that may be causing more students to stay in college and others to return to gain new skills. As the student loan debt has risen in stride with the declining labor market, delinquency rates have been steadily increasing, resulting in a high volume of accounts that are two or more payments past due or in collections. Heading into 2012, however, unemployment is expected to drop further, which may slow the growth of this lending sector over the course of the year.
Increasing auto sales are driving an increasing demand for auto financing. Growth in auto bank and auto finance originations continue to trend upward nationally, with auto loan inquiries up 27%, which demonstrates continued positive momentum.
Outstanding balances of home mortgages (including first liens and home equity lines and loans) declined by $1 trillion (10.4%) since 2008 and continue to drop. Mortgage rates are at all-time lows, and refinance shares are high but mortgage originations are not responding to low rates. Tighter lending guidelines are reflected in loans made to the prime risk segment,* which now comprise more than 80% of all new mortgage originations.
*Equifax risk scores of 700 or higher
Equifax and Moody’s Analytics are leaders in the collection, analysis, and forecasting of household credit trends.
CreditForecast.com, a joint product of Equifax and Moody’s Analytics, provides insight into how local economies affect consumer credit behavior and performance. Creditforecast.com provides history and forecasts for a wide range of household credit, economic, and demographic variables across targeted geographic markets throughout the U.S. — enabling customers to examine, segment, and stratify credit risk and economic data. CreditForecast.com covers all major consumer product lines including first mortgage, home equity, auto loans, bankcards, student loans, consumer finance and retail. For more information, please visit www.creditforecast.com, email firstname.lastname@example.org or call +1.866.275.3266
About Equifax, Inc.
Equifax is a global leader in consumer and commercial information solutions, providing businesses of all sizes and consumers with information they can trust. We organize and assimilate data on more than 500 million consumers and 81 million businesses worldwide, and use advanced analytics and proprietary technology to create and deliver customized insights that enrich both the performance of businesses and the lives of consumers.
Headquartered in Atlanta, Equifax operates or has investments in 17 countries and is a member of Standard & Poor’s (S&P) 500® Index. Its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. For more information, please visit www.equifax.com.