Consumer Credit: Almost Tight

Credit conditions are beginning to squeeze consumers, but credit availability is not quite at recessionary levels yet.

Not Quite Yet

Bloomberg recently profiled the signs of stress in the subprime auto market. But failed to mention that the Prime auto market, which makes up 90% of loans, has record-pristine-credit at the moment.

Same Story in Credit Cards

Most consumers are doing fine - enjoying record high home equity levels and low unemployment rates. So consumer delinquency on credit cards is still returning to pre-pandemic levels.

Under the Covers

Subprime credit card cohorts are also beginning to experience pain. Discover’s earnings last week highlighted that weaker borrowers are beginning to default at accelerating rates, potentially kicking off the credit cycle.

Eye on the Ball: Housing

While subprime credit card and auto lending get the headlines, mortgages are 75% of consumer borrowing in the US. For tighter consumer credit to have a broader economic impact, the housing market will need to weaken.