Posts Tagged ‘borrowing’

Consumer Borrowing Slows in June

Posted on August 10, 2017 by Laura Lam

Consumer borrowing slowed a bit in June from the torrid growth in the prior month, but continued at a solid pace, according to government data released Monday.  Total consumer credit increased $12.4 billion in June to a record seasonally adjusted $3.86 trillion, posting an annual growth rate of 3.9%, according to the Federal Reserve.  This is down from a revised $18.3 billion gain in May, which was the strongest rate in six months. Consumer borrowing slowed a bit in the second quarter as a whole, continuing a trend in place since last fall. Credit rose at a 4.5% annual rate…

Small Business Borrowing Hits 2 Year High

Posted on August 01, 2017 by Laura Lam

Borrowing by small U.S. companies hit a nearly two-year high in June, driven by restaurants and hotels, PayNet Inc said on Tuesday, as businesses invested to meet customer demand.  The Thomson Reuters/PayNet Small Business Lending Index for June rose to 139.9, its highest since July 2015, from an upwardly revised May reading of 138.3. Small business borrowing is a key barometer of growth because those companies do much of the hiring that drives economic gains.  Still, measured from a year earlier, borrowing was flat, according to the provider of credit ratings on small companies. “It really tells me they are…

Household Debt Hits New Record

Posted on May 23, 2017 by Laura Lam

Household debt is topping its 2008 peak prior to the housing crash. Total household debt has risen to $12.73 trillion in the first quarter, the Federal Reserve Bank of New York reported last week. However, Americans are handling their debt—mortgages, credit cards, auto loans, and other forms of borrowing – much better, the report shows.  Americans were delinquent on 4.8% of total debt in the first quarter. For comparison, at the end of 2009, 11.9% of consumers were delinquent on their debt by at least 30 days. The increase in household debt may indicate that more Americans are confident about…

Tappable Equity Hits 10-Year High

Posted on April 05, 2017 by Laura Lam

An annual home price appreciation of 5.5% during 2016 helped to increase the number of mortgage holders with tappable equity to 39.5 million, according to new data from Black Knight Financial Services (BKFS). More than two-thirds of the tappable equity level belongs to borrowers with current interest rates below today’s 30-year interest rate. Tappable equity – defined as the amount of lendable equity available to a borrower before hitting a combined loan-to-value ratio of 80% – reached the $4.7 trillion mark last year. An equity growth of $570 billion throughout 2016 pushed the total equity level to its highest level since…

Why are Cities and States Reluctant to Borrow?

Posted on August 26, 2016 by Laura Lam

Wall Street is urging governments to invest in big-ticket infrastructure projects. Voters and public officials have a different message: not so fast.  Plunging global interest rates have made borrowing cheaper than ever. But instead of spending on aging roads, bridges and buildings, many state and local governments are scaling back. New government-bond issues have dropped to levels not seen in the past 20 years. Municipal borrowers issued about $140 billion in bonds for new projects last year. Adjusted for inflation, that is 53% lower than in 2006 and 21% lower than in 1996. So far this year, municipalities have borrowed…

Companies Still in Debt Despite Inflated Balance Sheets

Posted on May 26, 2016 by Laura Lam

Combining all of the corporate cash in the U.S. wouldn’t cover the $1.8 trillion of corporate debt that’s coming due in the next 5 years, according to a report by Moody’s Investors Service.  That’s because U.S. companies have been borrowing more quickly than they’ve built up the record $1.68 trillion of cash on their balance sheets. More of that debt comes due sooner. “You’re seeing more and more borrowing,” Richard Lane, said senior vice president at Moody’s.  “The increase in leverage has been notable.”  Cash coverage of near-term maturities hasn’t fallen below 100% since 2012, and hasn’t been as low…