According to data from the Federal Reserve Bank of New York.
The share of discouraged borrowers, defined as respondents who said they needed credit but who did not apply because they did not expect to be approved, climbed to 8.5% in the lastConsumer expectations survey. It is the highest level since the start of the study in 2013.
The perceived probability of being rejected has increased in different forms of credit, cards with guaranteed loans to buy houses and cars. About a third of car loans that should be refused, the highest share since the start of the series, while almost half of all respondents in the February survey said it would be more difficult to obtain credit in a year.
The data add to an image of increasingly fragile household finance for many Americans, because a cooling labor market slows wages while high borrowing costs make invoices more difficult to pay. Delinquency rates remain low compared to pre-pale standards, but they are higher in most categories, and lenders become cautious.
More than four out of 10 American owners who sought to refinance their mortgages were rejected, according to the February investigation, quadruple the share in October 2023.
The mortgage rates that are even much higher than a few years ago, many people looking for a REFI are probably trying to exploit the actions accumulated during the recent housing boom in order to respect other debt or expenses, rather than reducing their monthly payments. The inability to do so could put under pressure to sell their homes.
Meanwhile, the share of consumers of the New York FED survey who said they could find $ 2,000 when needed, fell 63%, a new series.
This story was initially presented on Fortune.com
