Posts Tagged ‘consumer debt’

Credit Card Delinquencies Are Rising

Posted on November 01, 2017 by Laura Lam

While it’s easy to ignore when the stock market is at record highs and unemployment is reassuringly low, household debt is on the rise.  The Center for Microeconomic Data’s (CMD) latest Quarterly Report on Household Debt and Credit reveals that total household debt rose by $114 billion (0.9%) to $12.84 trillion in the second quarter of 2017.  This increase put overall household debt $164 billion above its peak in the third quarter of 2008, and 15.1% above its trough in the second quarter of 2013 Consumer debt, in many ways, should generate more concern – during the good times.  The persistence of…

Millennials’ Debt Load Could Weigh Down Economy

Posted on May 09, 2017 by Laura Lam

Millennials — 21 to 34-year-olds — hold an estimated $1.1 trillion of the country’s $3.6 trillion in consumer debt, according to UBS, as rising student and auto loans outweigh a drop in mortgages.  All that rising debt is coming with rising default risks. A UBS evidence lab survey found that 52% of people worried about defaulting on any loan over the next 12 months were in the 21 to 34 age group. That’s not good news considering those same individuals are meant to be the largest source of spending on big-ticket purchase items like houses and cars over the next year.  There is already…

Consumer Defaults Predicted to Rise in 2017

Posted on April 24, 2017 by Laura Lam

About 17% of all U.S. consumers are likely to default on a loan payment over the next year, according to a recent report from UBS. More interesting, perhaps, is who these defaulters are.  The UBS Evidence Lab reports that the group’s profile is “middle and upper income, younger, male, urban, and concentrated in the coastal regions.” The UBS researchers also found evidence that defaults on auto loans are likely to spread to more non-prime defaults on credit cards and personal loans. About 16% of all auto loans outstanding are subprime, amounting to $179 billion out of total auto loans of…

Will These Mortgage Trends Make a Comeback in ’17?

Posted on January 05, 2017 by Laura Lam

The boom-bust cycle of refinancing and a host of other mortgage trends and strategies tend to come and go and come again depending on varying factors.  “It is a cyclical business,” said David Kittle, president of The Mortgage Collaborative.  It’s been a while since the cycle has turned, but it’s finally expected to this year due to the new administration and Congress and the recent rise in rates. Some mortgage-related ideas and market conditions from the past are likely to be back as a result.  Not all of the following retro industry market trends or proposals may become realities in…

Consumer Debt Rises with Age

Posted on March 03, 2016 by Laura Lam

Debt held by consumers in the U.S. as they age is rising, according to an analysis by the Federal Reserve Bank of New York.  From 2003 to 2015, debt of borrowers between ages 50 and 80 increased by approximately 60%, according to the Fed’s researchers. Researchers also found that aggregate debt of younger borrowers declined modestly from 2003 to 2015 “with a debt portfolio reallocation away from credit card, auto, and mortgage debt, toward student debt.”  “This shifting of debt from younger to older borrowers is of obvious relevance to markets fueled by consumer credit. It is also relevant from a loan performance perspective…

5 Strange Signs that the Economy is Improving

Posted on March 03, 2014 by Saldutti

The recession that ran from 2007 to 2009 seemed to be good for family cohesion: The divorce rate hit a 40-year low, grown kids moved back in with their parents, and the proportion of people leaving their hometown for greener pastures sank to the lowest level since the idyllic 1950s. However, this family bonding was largely an illusion. In reality, people put off big decisions that might have hurt their budgets, no matter how much teeth-gritting it required. The economy is still iffy – jobs are still somewhat scarce and consumer spending hesitant. The latest data shows the economy grew…

Study Finds Consumers Pay Credit Cards Before Mortgages

Posted on April 12, 2011 by Saldutti

TransUnion released a study that reveals the divergence in payment patterns – where consumers are increasingly apt to pay their credit cards before their mortgages – has now occurred for three straight years. However, for the first time since the deviation began, the percentage of consumers who are current on their credit cards and at least 30 days delinquent on their mortgage payments has declined. “The latest data from our study show that the new payment hierarchy has persisted for longer than many industry experts initially believed, and provides evidence that consumers continue to adjust their payment behavior in response…

Consumers' Credit is Tanking – More Q&A

Posted on July 13, 2010 by Saldutti

When it comes to managing your money, three little digits wield tremendous power over your future – and we’re not talking about your cholesterol or weight.  Once again, we’re discussing your credit score.  Your FICO score (which stands for Fair Isaac Corporation – a credit scoring model originated in 1956 to mathematically calculate risk) is the number that tells credit card issuers, mortgage lenders and other consumer finance companies how safe it is to lend you money. According to this week’s Associated Press report, American’s credit scores have sunk to an all-time low.  Over 25% of consumers (nearly 43.4 million people) now…