Consumers Putting Off Major Purchases

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A full one half of all consumers are uncomfortable making a major purchase such as a home, a car, major appliances or other significant items over the next three months.

Aug 8, 2007 05:00


COSTA MESA, Calif., -- One half of all US consumers are uncomfortable making a major purchase such as a home, a car, major appliances or other significant items over the next three months. The survey was conducted as a part of the Experian-Gallup Personal Credit Index.


In addition, consumer credit perceptions have been negatively impacted by the subprime mortgage market, the sharp increase in housing foreclosures and the recent surge in long-term interest rates.


The survey also found:


-- 58 percent believe the problems in the subprime mortgage market will


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affect the overall mortgage market, while 24 percent feel the problems


will be contained


-- 61 percent of consumers who are very familiar with subprime mortgage


loans believe the problems in the subprime mortgage market will spill


over into the overall mortgage market


-- 55 percent believe the federal government should pass new legislation


helping subprime borrowers keep their homes and avoid foreclosure


Overall, about 52 percent of consumers surveyed feel the average price of homes in their area will increase over the next year, while 29 percent believe prices will remain about the same. Eighteen percent of consumers expect that prices in their area will decrease.


Among homeowners, 50 percent believe that average prices will increase, while 32 percent feel they will stay about the same.


Additional survey results on consumer credit perceptions include:


-- 89 percent of consumers do not plan to apply for credit in the next


three months


-- 30 percent of households with annual incomes of less than $40,000 are


uncomfortable with their debt burden, while only 16 percent of those


with annual incomes of $75,000 or more are uncomfortable


-- 17 percent of consumers know someone who has been turned down for


credit during the past three months


The Experian-Gallup Personal Credit Index is based on a monthly nationwide survey of households and measures four key areas related to credit: level of debt, monthly payment burden, credit rating and debt extension capability. The sampling was conducted in April, May and June 2007 and included 3,011 adults, age 18 and over, randomly selected from across the country. The sampling error is plus or minus two percentage points.


For more information: http://www.experiangroup.com/.