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Spring Weather Brings Rise in Home Equity Revolving Lines of Credit

NationalMortgageProfessional.com
Apr 28, 2014

According to the latest Equifax National Consumer Credit Trends Report, the total limit of new credit for bank-issued credit cards leads origination growth in January 2014, followed by home equity revolving lines and auto lending. Changes in the total balance of new credit originated January 2013-2014 include: ►Home equity revolving: 18.4 percent increase ($6.2 billion to $7.3 billion); ►Bank-issued credit cards: 28.5 percent increase ($15.2 billion to $19.5 billion); and ►Auto: 19.8 percent increase ($28.6 billion to $34.3 billion). "Spring is here and consumers' desire for credit appears to be rising alongside the mercury," said Amy Crews Cutts, chief economist at Equifax. "Despite the relatively low numbers of new and used vehicles sold in January, auto originations were up nearly 20 percent from the same time last year. This suggests that consumers are responding positively to the generous terms and greater credit availability in the auto space. Credit card and home equity revolving lines of credit originations were also up sharply over the previous year, further signaling that not only are consumers interested in credit, but that banks are more willing to offer it." Other highlights from the most recent Equifax data include: Home equity revolving lines ►The total number of new loans in January 2014 is 71,600, an increase of 10 percent from same time a year ago; ►The total outstanding balance of existing loans in March 2014 decreased 6.5 percent from same time a year ago; ►Of total severely delinquent balances, 69 percent are from loans originated from 2005-2007; and ►The total balance of severely delinquent loans in March 2014 is slightly more than $8 billion, a five-year low. Bank-issued credit cards ►The total number of loans outstanding in March 2014 is more than 320 million, the highest since September 2009; ►Similarly, the total aggregate credit limit for bank cards in March 2014 is more than $2.5 trillion, a 55-month high; ►From March 2013-2014, write offs as a percentage of total balances decreased 13.2 percent (from 4.77 percent to 4.14 percent); and ►The total number of new cards issued in January 2014 is 3.7 million, a six-year high and an increase of 18.6 percent from same time a year ago. Auto ►The total number of new loans originated in January 2014 is 1.8 million, an eight-year high and an increase of 4.7 percent from same time a year ago; and ►The total balance of auto loans outstanding in March 2014 is up 10.3 percent from same time a year ago ($874 billion). The total number of loans outstanding is 6.1 percent higher (63 million). Both are nine-year highs.
Published
Apr 28, 2014