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The Week Ahead: Hope For Credit Growth

On Friday, the Federal Reserve will release its February 2017 Consumer Credit survey. The report covers multiple lines of credit, and indicates interest rates, outstanding credit, and terms of credit.

The report for January 2017 saw strong growth in credit unions. The National Credit Union reported on the trend as well, noting a year-over-year growth in 2016 of $1.09 trillion, 7.5 percent higher than 2015. Real estate loans, in particular, saw growth among credit union lenders. They rose 8.6 percent over the year, totaling $431.1 billion for the quarter. Auto loans rose 14 percent, and student loans increased by 9 percent.

Another Federal Reserve survey, the February SCE Credit Access survey, released every four months by the Federal Reserve Bank of New York revealed that though credit access is increasing, many consumer are feeling discouraged from applying for credit. Rejection rates on credit applications declined, but consumers still felt pessimistic. For example, February’s report revealed that consumers were 12.2 percent less likely to apply for a mortgage refinance than the previous report, in October.

Credit application rates declined from 42.3 percent in October to 39.9 percent, the lowest level since the series’ start in October 2013. The drop in application rates was broad-based across all credit scores and age groups. However, the per applicant rejection rate also dropped, from 23.3 percent in October to 21.2 percent. The drop was driven by younger (age 40 or less) respondents and those with higher credit scores (scores of 680 or more). The per application rejection rate also declined, from 39.3 percent in October to 35.1 percent.

The Federal Reserve Consumer Credit Survey will release on Friday at 3 p.m. EST.

This Week’s Schedule

United States Census Bureau Construction Spending study, Monday, 10 a.m. EST

Mortgage Bankers’ Association Mortgage Applications, Wednesday, 7 a.m. EST

Freddie Mac Weekly Mortgage Survey, Thursday, 10 a.m. EST

About Author: Seth Welborn

Seth Welborn is a contributing writer for DS News. He is a Harding University graduate with a degree in English and a minor in writing, and has studied abroad in Athens, Greece. An East Texas native, he also works part-time as a photographer.

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