Consumer applications for auto loans, new mortgages and revolving credit cards had mostly returned to pre-pandemic levels by May 2021, according to the Consumer Financial Protection Bureau (CFPB).
The CFPB says prime and near-prime consumers are driving this recovery.
Key findings:
– New mortgage credit inquiries experienced a smaller drop in March 2020 compared to other types of inquiries and then surged.
– Inquiries have subsequently exceeded their usual, seasonally adjusted volume by 10 to 30 percent, reflecting the unusually high activity in the mortgage market throughout the pandemic.
– Consumers with deep subprime credit scores showed the largest decline in auto loan inquiries compared to prior years, followed by inquiries from consumers with subprime credit scores. These consumers also showed declines in new mortgage and revolving credit card inquiries.
– Changes in auto loan and new mortgage applications were varied across the states, while changes in credit card applications were generally uniform.
“While consumer credit applications have generally recovered to pre-pandemic levels in the aggregate, we see important differences across consumers,” said Acting CFPB Director David Uejio. “Both borrowers with superprime and subprime credit scores are still not applying for credit as much as they were pre-pandemic. We will continue to keep a close watch on the marketplace as the economic recovery continues to help ensure all consumers have access to financial products and services that are fair, transparent and competitive.”
Source: CFPB
