Consumers Pessimistic About Credit Availability In Coming Months – NMP Skip to main content

Consumers Pessimistic About Credit Availability In Coming Months

Keith Griffin
May 09, 2022

Expectations stable on home price increases but high rent increases expected.

The monthly survey of consumer expectations shows consumers are negative about credit availability. Expectations on home prices remained steady but are still low.

The April 2022 Survey of Consumer Expectations from The Federal Reserve Bank of New York’s Center for Microeconomic Data showed median home price expectations were unchanged at 6%, but remain elevated relative to pre-pandemic levels. Home price expectations rose for respondents who live in the “South” Census region, but fell for respondents who live in the “Northeast” Census region.

That’s consistent with data released last week by the National Association of Realtors. Areas in the southern region, once deemed affordable, have shown year-over-year increases above 30%.

Consumers feel the money to buy those homes is tougher to get, too. For the fourth straight month, consumers are pessimistic about credit availability now and in the future. The survey said perceptions of credit access compared to a year ago deteriorated, with more respondents saying it is harder to obtain credit than one year ago.

According to the survey, “Expectations for future credit availability also deteriorated, with the difference between the fraction of respondents expecting it will be easier to obtain credit in the year ahead and the fraction of respondents expecting it will be harder to obtain credit in the year ahead falling to a series low.”

The survey also showed median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—increased slightly. The median expected increase in rent is now at a new series’ high.

Consumers don’t expect their salary increases to keep pace with inflation. The survey showed the median expected growth in household income increased by 0.1 percentage point to 3.1% in April. This reading is comparable to its 12-month trailing average of 3%, but it is below the series high of 3.4% recorded in December 2021. Inflation currently stands at 8.5%.

The Survey of Consumer Expectations contains information about how consumers expect overall inflation and prices for food, gas, housing, and education to behave. It also provides insight into Americans’ views about job prospects and earnings growth and their expectations about future spending and access to credit. The survey also provides measures of uncertainty regarding consumers’ outlooks. The survey is a nationally representative, internet-based survey of a rotating panel of approximately 1,300 household heads.

 

Published
May 09, 2022
Surprise! New-Home Sales Jump Nearly 11% In May

Increase was the first this year; April estimate of sales also revised upward.

Analysis and Data
Jun 24, 2022
Demand For Vacation Homes Falls Below Pre-Pandemic Baseline

Increasing mortgage rates, home prices, and loan fees makes second-home buyers say no thanks.

Analysis and Data
Jun 24, 2022
Black Knight: Past-Due Mortgages Fall To 3rd-Straight Record Low In May

Company’s “first look” finds serious delinquencies, foreclosure starts showing continued improvement.

Analysis and Data
Jun 24, 2022
Redfin: House Affordability Crisis 'Goes To 11'

Homebuying demand pulls back further as mortgage rates near 13-year high.

Analysis and Data
Jun 23, 2022
Home Flips Are Up, But Raw Profits Hit 13-Year Low

In a striking trend, profit margins slipped to their lowest point since 2009.

Analysis and Data
Jun 23, 2022
ATTOM Spotlights The Most Vulnerable Housing Markets

New Jersey, Illinois, and inland California had the highest concentrations of the most at-risk markets in the first quarter.

Analysis and Data
Jun 22, 2022