U.S. Consumer Credit Usage Firms Again in July • Nonrevolving borrowing usage surges. • Charge card balances ease further. Consumers continue to buy more using credit. Consumer
credit outstanding increased $12.2 billion during July (0.5% y/y)
following an $11.4 billion June increase, revised from $9.0 billion.
Credit usage had fallen in each month from March through May. A $13.0
billion rise had been expected by the Action Economics Forecast Survey. Nonrevolving credit usage rose $12.6 billion (3.9% y/y)
after increasing $13.2 billion in June, revised from $11.3 billion.
Borrowing from the federal government, which issues over 40% of
nonrevolving credit, grew 5.9% y/y. Depository institution loans (29% of
credit) gained a greatly lessened 3.6% y/y. Finance company borrowing
(16.0% of loans) rose 1.6% y/y and credit union loans (14.0% of the total)
increased 2.3% y/y. Revolving consumer credit balances weakened $0.3
billion (-8.7% y/y) in July, down for the sixth month this year. Credit
provided by depository institutions, 90% of the total and mostly credit
card debt, declined an accelerated 8.7% y/y. Credit union borrowing
dropped a quickened 5.9% y/y and finance company loans fell 22.3% y/y. These Federal Reserve Board figures are break-adjusted
and calculated by Haver Analytics. The breaks in the series in 2005, 2010
and 2015 are the result of the incorporation of the Census and Survey of
Finance Companies, as well as changes in the seasonal adjustment
methodology. The consumer credit data are available in Haver's USECON
database. The Action Economics figures are contained in the AS1REPNA
database.
by Tom
Moeller October 7, 2020
Consumer
Credit Outstanding (M/M Chg, SA)
Aug
Jul
Jun
Aug y/y
2019
2018
2017
Total ($ bil)
12.2
11.4
0.5%
4.6%
4.8%
5.3%
Nonrevolving
12.6
13.2
3.9
4.9
5.2
5.1
Revolving
-0.3
-1.8
-8.7
3.8
3.6
6.0
Global| Oct 07 2020Mortgage Applications Move Higher as Interest Rates Decline
by:Tom Moeller
|in:Economy in Brief
Summary
• Refinancing applications surge but purchase applications fall. • Mortgage interest rates reach record lows. The Mortgage Bankers Association Mortgage Loan Applications Index rebounded 4.6% (38.4% y/y) in the week ended October 2 [...]
Tom Moeller October 7, 2020
• Refinancing applications surge but purchase applications fall.
• Mortgage interest rates reach record lows.
The Mortgage Bankers Association Mortgage Loan Applications Index rebounded 4.6% (38.4% y/y) in the week ended October 2 after having declined 4.8% in the previous week.
Applications to refinance an existing loan surged 8.2% (49.8% y/y) following a 6.5% decline in the previous week. Purchase applications declined 1.5% (+21.1% y/y) after falling 1.9% in the previous week. The refinance share of mortgage activity rose to 65.4% of total applications. That remained down from the recent peak of 74.4% during all of April 2020. The adjustable-rate mortgage (ARM) share of activity held steady at 2.2% of total applications.
The effective rate on a 30-year fixed rate interest rate declined to a record low of 3.12% from 3.20% in the week ended September 25. The rate on 15-year loans fell to 2.68% from 2.77%. The effective rate for a Jumbo mortgage loan eased six basis points to 3.39%. The rate on the 5-year adjustable rate mortgage weakened 23 basis points to 2.92%.
The average mortgage loan size edged 0.4% higher (-1.9% y/y) to $322,500. The average size of a purchase loan improved 0.2% (12.4% y/y) to $371,500. The average loan size to refinance gained 1.5% (-9.4% y/y) to $296,600.
Applications for fixed-rate loans rebounded 4.6% (42.7% y/y) and applications for adjustable rate mortgages increased 3.2% (-43.3% y/y).
The survey covers over 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. The base period and value for all indexes is March 16, 1990=100. The figures for weekly mortgage applications and interest rates are available in Haver's SURVEYW database.
| MBA Mortgage Applications (%, SA) | 10//2/20 | 09/25/20 | 09/18/20 | Y/Y | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|
| Total Market Index | 4.6 | -4.8 | 6.8 | 38.4 | 32.4 | -10.4 | -17.8 |
| Purchase | -1.5 | -1.9 | 3.4 | 21.1 | 6.6 | 2.1 | 5.6 |
| Refinancing | 8.2 | -6.5 | 8.8 | 49.8 | 71.1 | -24.3 | -34. |
| 30-Year Effective Mortgage Interest Rate (%) | 3.12 | 3.20 | 3.24 | 4.08
(Oct '19)
|
4.34 | 4.94 | 4.32 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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