ARLINGTON, Va. — NAFCU's Macro Flash Data analysis for the month of May found the pace of consumer borrowing at a healthy $12.9 billion (seasonally adjusted) pace. This was more than double what was projected by economists, said NAFCU. Both revolving and non-revolving credit was up, reflecting strong consumer demand for products. Credit card and loans led the way, but NAFCU Chief Economist Dr. Tun A. Wai said he doesn't expect auto loans to keep growing, given that auto sales will begin to slump.
Credit unions' share of the total in consumer installment credit was 9.71% in May.
According to NAFCU's Flash Report, the Housing Market Index (NAHB) score for June 2007 was 28; a score over 50 indicates most builders are optimistic about the housing prospects over the next six months.
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On the lending side, NAFCU found that through May the increase in real estate secured loans accounted for 71.5% of total loan growth over the past 12-months. NAFCU said the pace of economic activity is forecast to remain below trend for most, if not all of this year, due primarily to the sluggishness in homebuilding and consumer spending.
Capital investment may offset that somewhat, and economic growth is forecast to pick up from 2% this year to 3.1$ in 2008.
NAFCU members are seeing an uptick in first mortgages (0.7%) and Home equity/second mortgages (0.4%) as a source of overall loan growth. With a decrease in home sales and the median prices of homes, which is expected to continue, NAFCU said the housing sector will remain soft, but demand should accelerate as the economy moves toward potential."
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