According to the latest consumer expectations survey from the New York Federal Reserve, consumers are more pessimistic about their perceived ability to get credit than a year ago. That is, when asked if trying to obtain credit was “much easier, somewhat easier, equally easy/hard, somewhat harder” or “much harder” than it was a year ago, a higher number of consumers felt it would be harder. More importantly, a higher percentage of consumers also felt it would be harder to get credit a year from now.
While this is an indication of perceived difficulty in obtaining credit and not a survey of actual difficulty in obtaining credit, it is an indicator that consumers are feeling like the fast times of easy credit availability may be coming to and end. Consumer expectations are often a leading indicator of how the markets are moving as the consumer on the street can feel slight changes to economic conditions before reports begin to reflect those changes.
Interestingly, the report gathers information for five specific credit products: auto loans, credit cards, credit card limit increases, mortgages, and mortgage refinancing. Each of the products has slightly different outcomes in terms of consumer expectation, but overall, there is a sense that credit availability is going down.
So, what does this mean for you, the average consumer? It may be time to examine your credit needs and determine if you should finally get that debt consolidation loan for instance. Or, if you feel like you might be able to obtain a better mortgage rate, maybe now is the time. But, as always, it is your job as a consumer to examine your own financial situation and make the right decision for your budget and needs.
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