January 1, 2007 - Experian-Gallup Personal Credit Index is up 17 points to 100 - matching, for the first time since its inception, the Index Baseline level established in March 2005. Lower energy prices, stable interest rates, and low unemployment rates all play a part in the consumer's improved perception of the nation's credit markets. Additionally, the survey uncovered new information about how consumers feel about the housing market. Nearly half of consumers say housing price collapse is possible in their local residential real-estate market
According to the Experian-Gallup Personal Credit Index survey, one in every two (52%) adults say they have heard of the housing bubble, though only 19% have heard a great deal about it. Men are more likely than women to say they have heard a great deal about the housing bubble. Homeowners are twice as likely as renters to say they heard a great deal about this.
Opinion is somewhat divided as to whether or not a housing bubble could occur in their area in the near future. Based on all consumers, 47% believe it is likely that such a housing bubble could occur in their area within the next three years (16% very likely and 31% somewhat likely). A slight majority (51%) do not think it is likely (36% not too likely and 15% not at all likely).
Based on homeowners, 43% think it is likely that a collapse of housing prices could occur in their area within the next three years (14% very likely and 29% somewhat likely), while 55% do not (40% not too likely and 15% not at all likely).
Few Believe Mortgage Interest Rates Will Go Down
When asked if they believed mortgage interest rates will go up, stay about the same, or go down over the next year, more than half (53%) in this fourth quarter think mortgage rates will go up and three in ten (31%) feel they will remain stable. Eleven percent think mortgage interest rates will go down in the next year.
Among those who think mortgage rates will go up in the next year, one in five (21%) believe they will only go up about half a percentage point. One-third (34%) feel mortgage interest rates will go up one percentage point, and 15% think they will go up one and one-half percentage points. Still, 28% who feel mortgage interest rates will go up think these rates will go up two (12%) or more than two (16%) percentage points.
More than Three In Five Homeowners Report Having a Mortgage on Their Home
Sixty-three percent of homeowners say they have a mortgage on their home (56% a fixed rate and 7% a variable rate). More than one-third (35%) of homeowners say they do not have a mortgage on their home.
Approximately one in five (21%) homeowners report having a home equity loan (16% a fixed rate and 5% a variable rate home equity loan).
Eighteen percent say they have a home equity account, money that they can borrow whenever they need it.
More than one-third (36%) who have a home equity loan or line of credit on their home say they got the loan/line of credit mainly to finance home improvements. Twelve percent who have a loan or line of credit say they got the loan or credit line to consolidate debts. One in twenty (5%) report getting the loan/line of credit to pay off credit card debt.
About the Experian-Gallup Personal Credit Index
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 included more than 3,000 adults, 18 and over, randomly selected from across the country. The survey's margin of error is +/- 2%.