Equifax, Moody's Predict Growth in Auto Finance Market
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 auto and home markets in 2012.
ATLANTA — 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 auto and home markets in 2012.
As numbers reflect pre-recession totals, consumers should anticipate steady economic growth in major sectors, according to both companies. Delinquency rates in auto, bankcard and consumer finance are back to pre-recession levels, while home mortgages continue to see the highest percentage of delinquencies.
"After spending recent years in the financial doldrums, U.S. consumers are poised to make a comeback in 2012," said Amy Crews Cutts, Equifax chief economist. "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 toward gaining traction in the coming months."
An increase inauto sales has been driving the increasing demand for auto financing, according to CreditForecast.com data. Growth in auto bank and auto finance originations continue to trend upward nationally, with auto loan inquiries up 27 percent, demonstrating continued positive momentum.
On the consumer lending front, 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, according to CreditForecast.com. Increased solicitations for credit cards are being seen, accompanied by a 41 percent increase in credit card inquiries since the recession low.
In 2011, the number ofnewbank 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, according to CreditForecast.com.
Retail sales were up 7.7 percent in 2011, the strongest showing since 1999, while outstanding balances of home mortgages declined by $1 trillion (10.4 percent) 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 percent of all new mortgage originations.
For more information, visit www.creditforecast.com, www.equifax.com or www.economy.com.
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