Experts Answer Questions On Inflation, Housing Affordability, and Consumer Credit

During our recent Market Pulse webinar, we discussed how staying ahead of the curve is essential for success. The September 2023 Market Pulse webinar was built on the previous month's discussion. It provided deep understanding for businesses and individuals alike. The webinar aimed to address the pressing questions that surfaced in previous discussions and conversations. 

Experts include: 

• Robert Wescott, President & Chief Economist of Keybridge 

• David Sojka, Risk Advisor at Equifax

• Tom Aliff, Risk Advisory Leader at Equifax

Check out our other Q&A blog from our September webinar on student loans. 

It was mentioned we now have the lowest percentage of housing market affordability since 1983. What do you see happening for Americans in the future since housing is no longer affordable? Is this a concern for the government?

Rob Wescott: Yes, housing affordability is the lowest in generations right now. Some of this is because mortgage rates are now at about 7 percent for a 30-year fixed rate mortgage. But another issue is that home prices have not dropped, as might have been expected, as interest rates have risen.

There are a number of policy steps that governments can take if they want to make housing more affordable. They could raise the amount of mortgage interest that is tax deductible on personal income taxes (currently limited to the first $750,000). They could make it easier for builders and developers to obtain building permits, say, by changing zoning provisions to allow more land in urban areas to be used for building. They could convert plots of land from single-family zoning to multi-family zoning, etc. Some local governments have offered “first time homeowner” tax credits of like $5,000 to encourage young families to buy a home.

How many adjustable rate mortgages are out there?

David Sojka: The adjustable-rate mortgage share of applications increased to 7.6%, which was the highest level in five months.

In recent years, did UAW salaries keep up with inflation?

David Sojka: Since the last contract in December 2019, hourly U.S. wages among motor vehicle and parts manufacturers (including union and nonunion workers) grew by 14.8%, to an average of $27.99 as of August 2023. Across all industries, average hourly earnings grew by 19% over that period to $33.82 (per NBC News article 9/13/23). 

Will balances, amount dues, past dues, and monthly payment amounts be reported?

David Sojka: The only loan category that will not be reported is anything related to the account being past due. This is per the administration's guidance, but it is still unclear if anything else might not be required to be reported. 

Are credit card issuers starting new card relationships with higher credit limits than they used to, or is the rise in credit limits related to issuers raising existing customer limits higher or more rapidly. 

Tom Aliff: Based on the data we are seeing, the average initial credit line is higher now than it was a couple of years ago.

To leverage the insights from the webinar, the Equifax Risk Advisory Team is available for consultation at riskadvisors@equifax.com. 

* The opinions, estimates and forecasts presented herein are for general information use only. This material is based upon information that we consider to be reliable, but we do not represent that it is accurate or complete. No person should consider distribution of this material as making any representation or warranty with respect to such material and should not rely upon it as such. Equifax does not assume any liability for any loss that may result from the reliance by any person upon any such information or opinions. Such information and opinions are subject to change without notice. The opinions, estimates, forecasts, and other views published herein represent the views of the presenters as of the date indicated and do not necessarily represent the views of Equifax or its management.