In my last post, I discussed the optimism of US bankers regarding loan delinquencies in our latest quarterly risk survey. On another positive note, survey respondents also indicated that access to credit was likely to improve.
When asked about credit availability over the next six months, the majority of respondents expect supply to meet or exceed consumer demand for all loan types except mortgages. For car loans, 77% of respondents expect credit supply to satisfy demand, while 71% felt this would hold true for credit cards.
Optimism wasn’t as high for small business and student loans. Only 52% of respondents expect credit supply to satisfy demand for small business loans, and 58% expect supply to meet or exceed demand for student loans.
These results are consistent with general sentiment that delinquencies will be less of a problem over the next six months. As lending risk declines, it’s natural to see credit availability expand—which would be welcome news to consumers and businesses alike, since it's such a critical driver of economic growth.
Unfortunately, a credit gap is expected to persist in housing. With many bankers still unsure about the real estate sector, 56% of survey respondents believe credit supply would not meet demand for residential mortgages. It will be interesting to see if this sentiment changes later this year, particularly if the job market continues trending in a positive direction.