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Consumer Credit Demand, Supply, and Unmet Need during the Pandemic

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Abstract

It is common during recessions to observe significant slowdowns in credit flows to consumers. It is more difficult to establish how much of these declines are the consequence of a decrease in credit demand versus a tightening in supply. In this post, we draw on survey data to examine how consumer credit demand and supply have changed since the start of the COVID-19 pandemic. The evidence reveals a clear initial decline and recent rebound in consumer credit demand. We also observe a modest but persistent tightening in credit supply during the pandemic, especially for credit cards. Mortgage refinance applications are the main exception to this general pattern, showing a steep increase in demand and some easing in availability. Despite tightened standards, we find no evidence of a meaningful increase in unmet credit need.

Suggested Citation

  • Jessica Lu & Wilbert Van der Klaauw, 2021. "Consumer Credit Demand, Supply, and Unmet Need during the Pandemic," Liberty Street Economics 20210520, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednls:91822
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    More about this item

    Keywords

    credit demand; credit access; pandemic; COVID-19;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance

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