Posts Tagged ‘income’

Banks See Slower Loan Growth, Higher Charge-Offs

Posted on June 12, 2017 by Laura Lam

FDIC-insured banks reported that the pace of loan growth slowed in the first quarter and that charge-offs on loans to individuals increased. But banks still recorded robust earnings for the period.  Total loans and leases fell by $8.1 billion, or 0.1% year-over-year, in the 3 months ended March 31, led by credit card loans, which posted a seasonal decline of $43.7 billion, or 5.5%. In its Quarterly Banking Profile, the FDIC attributed the decline to cardholders paying down outstanding balances, but residential mortgages also fell, by 0.5%. Credit to businesses offset some of the decline, with commercial and industrial loans up…

American Households Spend 53% of Its Income On These Expenses

Posted on May 19, 2017 by Laura Lam

If there’s one fairly steady theme over the past couple of decades, it’s that consumers are saving less of their income and their household budgets are being pushed to the limit.  According to the St. Louis Federal Reserve Bank’s February data, the personal saving rating in America was a paltry 5.6%. Comparatively, U.S. workers were socking away more than 12% of their paycheck 50 years ago.  At the same time, a number of household expenses have largely outpaced the inflation rate and wage growth. These include healthcare costs, college expenses, and in recent years housing costs, since home prices have…

Consumer Optimism Surges in March

Posted on April 13, 2017 by Laura Lam

Consumers continued growing more optimistic in March, however much of the increasing sentiment is due to changed evaluative criteria, according to the Survey of Consumers conducted by the University of Michigan.  The Index of Consumer Sentiment came in at 96.9 in March, an increase of 0.6% from February’s 96.3 and 6.5% from 91 in March 2016, according to the survey. This is slightly lower than the beginning of the month, when the index increased to 97.6. “The continued strength in consumer sentiment has been due to optimistic views on three critical components: higher incomes and wealth, more favorable job prospects, and low inflation…

Housing Confidence Reaches All-Time High

Posted on March 08, 2017 by Laura Lam

The Fannie Mae Home Purchase Sentiment Index (HPSI)  increased by 5.6 percentage points in February to 88.3, a new all-time high. The report found that 5 of the 6 components that comprise the HPSI were up, and 3 hit record highs. The net share of Americans who reported that now is a good time to buy rose 11 percentage points, while the net share who believe that now is a good time to sell rose 7 percentage points. Consumers also demonstrated greater confidence about not losing their jobs, with the net share rising 9 percentage points. “The latest post-election surge…

What Does the Average American Spend on Housing?

Posted on February 24, 2017 by Laura Lam

While the cost of college has climbed at an alarming rate over the past 20 years, there remains no purchase more significant — financially or, perhaps, emotionally — than a house. While some have rightly questioned whether the American Dream is worth pursuing, the fact remains that we all need a place to rest our heads at night. According to the Bureau of Labor Statistics’ (BLS) 2014 Consumer Expenditure Survey (CES), the average American household spends about $1,030 per month on rent or mortgage, inclusive of property taxes, insurance, and utilities (not including telephone). That’s roughly 21% of the average household’s income…

Rising Interest Rates Take Toll on Home Affordability

Posted on February 02, 2017 by Laura Lam

November brought a reversal to the growing home affordability with a sudden drop, according to First American Financial Corp.’s Real House Price Index.  What the company calls “real house prices” increased 4.4% from October to November, reversing the decreasing trend. “Real purchasing-power adjusted house prices jumped 4.4% month-over-month, reversing a 6-month trend of decreases,” said First American Chief Economist Mark Fleming.  “Year-over-year, real house prices have increased 2%.”  “The shift in real house prices signals a decrease in affordability, driven primarily by rising mortgage rates,” he added.  “However, while rates are increasing, they remain very low from a historical standpoint.” The RHPI…

33% of Rehabbed Student Loans to Go Back Into Default

Posted on November 11, 2016 by Laura Lam

A new report by the Consumer Financial Protection Bureau, found that 1 in 3 student-loan borrowers with very low incomes who have “cured” a loan in default in the past year are likely to default again. The federal agency’s student-loan ombudsman’s latest annual report highlights complaints the bureau has received from the “most economically distressed” borrowers about the transition from default to an income-driven repayment plan. The bureau estimates that more than 650,000 such borrowers “rehabilitated” a defaulted federal student loan last year by making $5 monthly payments for nine months. It projects that over the next 24 months, more than…

Consumer Become Pessimistic on Economy/Housing

Posted on November 09, 2016 by Laura Lam

Home purchase sentiment fell for the third straight month in October, reflecting the uncertainty consumers face, according to Fannie Mae.  Fannie Mae reported that its Home Purchase Sentiment Index dropped 1.1 points to 81.7 from the month prior. Four of the index’s six components decreased, including the share of consumers expecting home prices to go up and the share of consumers reporting significantly higher income from last year. “The HPSI fell in October for the third straight month from its record high in July, reaching the lowest level since March,” said Doug Duncan, senior vice president and chief economist at…

Household Income Grew 5.2% in 2015

Posted on October 06, 2016 by Laura Lam

Americans last year reaped the largest economic gains in nearly a generation as poverty fell, health insurance coverage spread and incomes rose sharply for households on every rung of the economic ladder, ending years of stagnation.  The median household’s income in 2015 was $56,500, up 5.2% from the previous year – the largest single-year increase since record-keeping began in 1967, according to the Census Bureau.   The share of Americans living in poverty also posted the sharpest decline in decades. The gains were an important milestone for the economic expansion that began in 2009. For the first time in recent years, the…

Housing Still Faces Obstacles; Could Be ‘Engine of Growth’

Posted on June 28, 2016 by Laura Lam

The Joint Center for Housing Studies (JCHS) at Harvard University released its 2016 report on The State of the Nation’s Housing. Calling the housing sector “an engine of growth,” the study found that the need to replace old housing and to meet demand for vacation homes and other units, new housing construction should average “at least” 1.6 million units annually for the next decade. New home building faces some headwinds however. Tighter lending rules are one serious issue. Mortgage lenders have made essentially no loans to potential buyers with subprime credit scores (below 620) and have cut back sharply on loans to applicants…