What's the early effects of Covid-19 on US household debt (to Monday 13 April)? Thanks to great work @Equifax @EquifaxInsights we're starting to know. Here's my summary... 1/8
#HouseholdFinance #CoronaVirusIndicators
#HouseholdFinance #CoronaVirusIndicators
The boom in household debt since 2013 is done. Outstanding debt flattened off in aggregate and across mortgages + autos.
This is the stock so a slow-moving variable. Seeing flow of new accounts would be a more leading indicator. 2/8
This is the stock so a slow-moving variable. Seeing flow of new accounts would be a more leading indicator. 2/8
We are starting to see quite a sharp decline in credit card debt (both general purpose + retailer cards).
Given what we've seen in other data this is likely due to lower purchases. 3/8
Given what we've seen in other data this is likely due to lower purchases. 3/8
Credit card utilization is falling but this is broadly in line with its longer-term trend.
I expect there's a lot going on behind this with more lower credit score people hitting their limits but more higher score people spending less so utilizing less. 4/8
I expect there's a lot going on behind this with more lower credit score people hitting their limits but more higher score people spending less so utilizing less. 4/8
In contrast home equity line of credit utilization had been falling since 2011 but has now flattened (slightly going up).
If you have a relatively low-interest credit line such as this available it makes sense to use it now. 5/8
If you have a relatively low-interest credit line such as this available it makes sense to use it now. 5/8
Serious delinquencies unchanged...so far
Though at this early stage in the crisis what we want to know is entrances into delinquencies whereas the pack uses 3 month moving averages of being 60+ or 90+ days past due. 6/8
Though at this early stage in the crisis what we want to know is entrances into delinquencies whereas the pack uses 3 month moving averages of being 60+ or 90+ days past due. 6/8
One exception is student loans. Delinquency rates have massively declined thanks to CARES Act. 7/8
I expect there's a lot of important variation across states + credit scores behind these aggregates.
PSA @EquifaxInsights @Equifax are updating these weekly🙏 Sign-up here: equifax.com/business/marke… 8/8
PSA @EquifaxInsights @Equifax are updating these weekly🙏 Sign-up here: equifax.com/business/marke… 8/8
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