The Experts Answer Your Questions on Inflation, Housing Prices, and More
Both before and during each Market Pulse webinar, our audience submits their burning questions to our expert speakers. For our November Market Pulse webinar, our panel included Amy Crews Cutts, President and Chief Economist at AC Cutts & Associates, Maria Urtubey, Risk Advisor at Equifax, and Rebecca Oakes, VP of Analytics at Equifax Canada. Below are their answers on questions around auto loans, consumer payment hierarchy, and more.
Q: Auto loan rates have come down based on dealer transaction level data. The auto loan rates data source you're looking at hasn't caught up yet.
Amy Crews Cutts: Yes, you're right. Cox Automotive's Jonathan Smoke has their series from their platform, which includes nonbank lenders as well and those rates are more sensitive than commercial banks, but not as sensitive as mortgage rates.
Q: Spending increase is a reflection of inflation, not that people are buying more. What they buy is more expensive.
Cutts: The series on consumer spending is inflation adjusted (so "real" spending). But it is being driven by higher income households who have more discretionary spending to work with. Those living paycheck to paycheck are not increasing spending.
Q: Are you seeing any change in consumer payment hierarchy for consumers that can't afford to pay all their monthly debt obligations? In other words, is there any change to which bills consumers prioritize when they can't pay all their bills?
Maria Urtubey: Retail Card, followed by Bankcard, was historically at the bottom of the list; except among GenZ-ers, who show Bankcard last since the middle of last year.
HELOC and Auto are at the top, disputing the 1st and 2nd position in payment priority since 2022 across generations. Among Traditionalists, though (those born in 1945 and earlier), Mortgage, Auto and Consumer Finance have disputed the second position after HELOC in payment priority since the end of 2022.
Q: What about house prices in Florida? I’m hearing houses are not selling due to hurricane issues.
Cutts: Some areas of Florida are already seeing prices fall due to flood/storm surge risk. Places like Orlando and Ocala, interior, are less affected by the hurricane risk and their prices are holding up. The lack of insurance options is also affecting the ability to sell at any price.
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