Weekly Market Insight . Total Consumer Credit; Excluding Mortgages, Seasonally Adjusted . 02/13/12

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Total Consumer Credit
Excluding Mortgages, Seasonally Adjusted
February 13, 2012
Sources: Federal Reserve, Grubb & Ellis
The amount of consumer credit outstanding rose sharply in November and December by annualized rates of 9.9 and 9.3 percent, respectively. Consumer credit has two main components: nonrevolving credit, which includes loans for automobiles, mobile homes, education and a few other categories, and revolving credit, primarily credit card loans. Since hitting bottom in May 2010, nonrevolving credit, which accounts for more than two-thirds of the total, has expanded every month except August 2011 when the debt ceiling debate reached a climax in Congress and confidence sagged. Revolving loan balances hit a low in April 2011 and have risen fitfully since then. Mortgage debt on one-to-four-family residences, which is not counted as consumer credit (and is not included in the chart) continues to decline, falling $59 billion in the third quarter of 2011 to $10.3 trillion. Thus, while consumers continue to shed mortgage debt, they are adding debt at a rapid pace to pay for vehicles and educations and at a modest pace on their credit cards. Growth in revolving credit helped lift consumer spending late last year, while the ongoing decline in outstanding mortgages is supporting robust levels of apartment leasing.
Robert Bach, Senior Vice President, Chief Economist, has 30 years of professional experience in real estate market research, consulting and city planning. His commentary on the real estate markets is provided here on a weekly basis.

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Robert Bach
Senior Vice President, Chief Economist

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© 2012 Grubb & Ellis, all rights reserved.

About CRE Northwest

Specialist in office & investment real estate in Seattle & the Eastside
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