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Housing Market Continues to Drive Credit

NationalMortgageProfessional.com
Jun 04, 2014

According to the latest Equifax National Consumer Credit Trends Report, the automotive lending sector continues its strong performance in 2014, highlighted by "Auto lending continues to lead the recovery," according to Amy Crews Cutts, chief economist at Equifax.  ►Total outstanding balance: $884 billion in April 2014, a record high and an increase of 10.8 percent from same time a year ago; ►New credit: $69.6 billion year-to-date in February 2014, an eight-year high and an increase of more than 13 percent from same time a year ago; and ►Serious delinquencies: represent less than one percent of total outstanding balances, the lowest level in more than five years. "By any metric you consider, whether new originations, total balances, or low delinquency levels, the auto sector is running on all cylinders," said Cutts. "The boom in auto purchases ended in 2004, and people are now thinking about replacing their jalopies as the average age of a car on the road today is over 11.4 years old and the financing terms are favorable for those with decent credit histories." Other highlights from the most recent Equifax data include: First mortgage ►Though down from the previous month, the total balance of first mortgages outstanding in April is showing an increase of 2.7 percent from same time a year ago; ►Delinquent first mortgages, those 30-days or more past due, represent less than 4.94 percent of outstanding balances, a decrease of more than 24 percent from same time a year ago; ►Similarly, the total balance of first mortgages 90-days past due or in foreclosure is less than $240 billion, a six year low and a decrease of more than 30 percent from same time a year ago; and ►Delinquencies on first mortgages originated 2010 and later represent 10 percent of total delinquencies. Home equity revolving ►The total limit of new credit year-to-date in February is $14.4 billion, a five year high and an increase of 15.8 percent from same time a year ago; ►Over 140,000 new loans were originated year-to-date in February, a five-year high and a year-over-year increase of eight percent; ►The total balance of severely delinquent home equity revolving loans in April 2014 is less than $8 billion, a five-year low and a decrease of 12 percent from same time a year ago; and ►The total balance outstanding on home equity revolving loans continues to decline, falling 6.1 percent in April from the same time last year and shedding 29 percent relative to the May 2009 peak. Home equity installment ►The total balance of home equity installment loans has fallen 13.3 percent from same time a year ago and is down 58 percent from the September 2007 high; ►The total number of home equity installment loans outstanding has fallen 11 percent from April 2013; ►The total balance of home equity installment loans in foreclosure is $400 million; and ►The total balance of severely delinquent home equity installment loans (90 days past due or in foreclosure) is slightly over $3 billion, a five-year low and a decrease of nearly 35 percent from same time a year ago.
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