Banks continued to tighten credit guidelines for all types of loans during the first quarter of 2008, according to the Federal Reserve‘s latest Senior Loan Officer Opinion Survey on Bank Lending Practices.
The majority of U.S. respondents reported that they had bolstered their lending standards on prime, nontraditional, and subprime residential mortgages over the past three months, while 60 percent said they beefed up guidelines for prime mortgages.
Of the 37 banks and mortgage lenders that originated nontraditional residential mortgage loans, roughly 75 percent reported tighter lending standards over the last three months, while 7 of 9 subprime lenders indicated similar sentiment.
About one in four U.S. respondents said they experienced weaker demand for prime residential home loans over the last quarter, and 30 percent indicated the same for nontraditional loans.
Roughly 65 percent said demand had dipped for subprime mortgage loans in the first quarter.
With regard to home equity lines of credit, 50 percent of U.S. respondents reported having tightened terms on existing loans over the past six months, with nearly all citing the decline in home price below the appraised value for implementing the changes.
And about 70 percent of domestic respondents indicated that they had tightened their standards for HELOC applications over the last three months.
Commercial real estate loans were no different, with 80 percent of domestic banks and 55 percent of foreign banks reporting a tightening of credit during the first quarter, with about 35 percent of domestic banks reporting weaker demand for such financing.
If you were curious if the mortgage crisis has spread into consumer lending, note that about 30 percent of U.S. banks reported tighter lending standards on credit card loans, up from 10 percent in the previous study.
Additionally, about 25 percent of domestic banks, up from around 15 percent in the January survey, said they were less willing to make consumer installment loans, with about 45 percent reporting tighter standards on such loans, up from 30 percent three months earlier.
There’s been a lot of hubbub lately about a new rule that was supposed to go into effect on April 1.
I say “supposed to” because the FHA has since rescinded the rule, at least until July 1, and is now asking for public comment to get their head around it all.
My guess is that it will be overturned, and things will go back to how they are now, but only time will tell.
The Rule in Question
In short, the new underwriting rule requires prospective FHA loan holders to pay off any collection or combination of collections that totals more than $1,000.
So if you happened to have an erroneous medical collection, or were currently disputing a credit card collection, you’d have to settle it before receiving your FHA loan.
Even if the charge happened to be bogus, if you wanted an FHA loan, you’d either have to pay the collection off in full or setup a payment plan with the collection agency (and make three verifiable payments).
Those payments would also factor into a borrower’s debt-to-income ratio, which could limit or jeopardize the mortgage.
Put simply, you’d have to make a commitment to pay off the debt in order to qualify for the mortgage.
In the past (and I suppose currently), the FHA did not require that collection accounts be paid off as a condition of mortgage approval (unless it was a court-ordered judgment).
Sure, underwriters would still need to take a look to see what it was and how it might impact the issuance of a mortgage, but it wouldn’t be an outright roadblock.
Why the New Rule is a Problem
The new rule is problematic for a couple reasons. I suppose the biggest issue is that FHA loans were originally intended for lower income borrowers with little money set aside for down payment.
So those with sizable collection accounts, and presumably little cash on hand, would probably have difficulty paying off the debts while having enough money leftover for down payment, closing costs and future mortgage payments.
Along with that, the rule essentially forces would-be borrowers to pay off the collection account(s), even if they aren’t legit. Or if they are currently in dispute.
There are plenty of erroneous collections out there, so forcing borrowers to settle them isn’t necessarily fair.
*The FHA excludes disputed accounts or collections resulting from identity theft or unauthorized use if appropriate documentation is provided.
All that said, this is a good lesson for first-time homebuyers and current homeowners alike to stay on top of their credit.
That means ordering a credit report several months before applying for a mortgage to see where you stand, and also to ensure that nothing is reporting in error (or legitimately) that could hold you back from obtaining a mortgage.
After all, you don’t ever want to limit your options when it comes to getting a mortgage.
Read more: What credit score is needed for a mortgage?
“Don’t allow what’s happening right now from a rates perspective to control whether you decide to continue to be in business or not. A lot of people got into the business because it was a quick buck. We had a refi boom and had all these deals. There was so much business out there. As … [Read more…]
The world’s central banks have unleashed the steepest series of
interest-rate increases in decades during their two-year drive to tame
inflation—and they may not be done yet. Policymakers have raised rates by
about 400 basis points on average in advanced economies since late 2021,
and around 650 basis points in emerging market economies.
Most economies are absorbing this aggressive policy tightening, showing resilience over the past year, but core inflation remains elevated in several
of them, especially the United States and parts of Europe. Major central
banks therefore may need to keep interest rates higher for longer.
In this environment, risks to the world economy remain skewed to the
downside, as we detail in in our Global Financial Stability Report. Though this latest assessment of vulnerabilities is similar to what we
noted in April, the acute stress we saw in some banking systems has since
subsided. However, we now see indications of trouble elsewhere.
One such warning sign is the diminished ability of individual and business
borrowers to service their debt, also known as credit risk. Making debt more
expensive is an intended consequence of tightening monetary policy to
contain inflation. The risk, however, is that borrowers might already be in
precarious positions financially, and the higher interest rates could
amplify these fragilities, leading to a surge of defaults.
Eroding buffers
In the corporate world, many businesses suffered closures during the
pandemic, and others emerged with healthy cash buffers thanks in part to
fiscal support in many countries. Firms were also able to protect their
profit margins even though inflation had picked up. In a higher-for-longer
world, however, many firms are drawing down cash buffers as earnings
moderate and as debt servicing costs rise.
Indeed, the GFSR shows increasing shares of small and mid-sized firms in
both advanced and emerging market economies with barely enough cash to pay
their interest expenses. And defaults are on the rise in the leveraged loan
market, where financially weaker firms borrow. These troubles are likely
going to worsen in the coming year as more than $5.5 trillion of corporate
debt comes due.
Households too have been drawing down their buffers. Excess savings in
advanced economies have steadily declined from peak levels early last year
that were equal to 4 percent to 8 percent of gross domestic product. There
are also signs of rising delinquencies in credit cards and auto loans.
Headwinds also confront real estate. Home mortgages, typically the largest
category of household borrowing, now carry much higher interest rates than
just a year ago, eroding savings and weighing on housing markets. Countries
with predominantly floating rate mortgages have generally experienced
larger home price declines as higher interest rates translate more quickly
into mortgage payment difficulties. Commercial real estate faces similar
strains as higher interest rates have resulted in funding sources drying
up, transactions slowing, and defaults rising.
Higher interest rates also are challenging governments. Frontier and
low-income countries are having a harder time borrowing in hard currencies
like the euro, yen, US dollar and UK pound as foreign investors demand
greater returns. This year, hard currency bond issuances have occurred at much
higher coupon—or interest—rates. But sovereign debt concerns do not only apply to low-income countries, as the recent surge in longer-term interest rates in advanced economies has demonstrated.
By contrast, major emerging economies largely do not face this predicament
given better economic fundamentals and financial health, although the flow
of foreign portfolio investment into these countries has also slowed.
Material amounts of foreign investment have left China in recent months as
mounting troubles in its property sector have dented investor confidence.
Spillover effects
Most investors appear to have shrugged off mounting evidence that borrowers
are having repayment troubles. Along with generally healthy stock and bond
markets, financial conditions have eased as investors appear to expect a
global soft landing, in which higher central bank interest rates contain
inflation without causing a recession.
This optimism creates two problems: relatively easy financial conditions
could continue to
fuel inflation, and rates can tighten sharply if adverse shocks occur—such as an
escalation of the war in Ukraine or an intensification of stress in the
Chinese property market.
A sharp tightening of financial conditions would strain weaker banks
already facing higher credit risks. Surveys from several countries already
point to a slowdown in bank lending, with rising borrower risk cited as a
key reason. Many banks will lose significant amounts of equity capital in a
scenario where high inflation and high interest rates prevail and the
global economy tips into recession, as we explore in a
forthcoming GFSR chapter. Investors and depositors will scrutinize the
prospects of banks if their stock-market capitalization falls below the
value of balance sheet, causing funding problems for the weak bank. Outside
of banking system, fragilities are also present for nonbank financial
intermediaries, such as hedge funds and pension funds, that lend in private
markets.
Reassuringly, policymakers can prevent bad outcomes. Central banks must
remain determined in bringing inflation back to target—sustained economic
growth and financial stability is not possible without price stability. If
financial stability is threatened, policymakers should promptly use
liquidity support facilities and other tools to mitigate acute stress and
restore market confidence. Finally, given the importance of healthy banks
to the global economy, there is a need to further enhance financial sector
regulation and supervision.
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
Credit card shimming is an updated version of skimming that reads credit card chip information, allowing the card to be duplicated or its information to be sold illegally.
Chip-enabled cards were designed to prevent instances of identity theft and fraud by adding an additional layer of security. That is, until criminals began credit card “shimming.”
Shimming is an updated version of skimming that reads credit card chip information, allowing the card to be duplicated or its information to be sold illegally.
Shimming vs. skimming
Before chip-enabled cards, skimming was a method of identity theft that would read a card’s magnetic stripe. Shimming is largely the same concept, but instead of reading the stripe, skimmers read the information in the card’s chip.
Both skimming and shimming require the fraudster to attach or insert a mechanism into a card reader in order to gather the information. These can be tricky to spot for unsuspecting consumers, but understanding how they work will help you be more aware the next time you insert your credit or debit card.
How credit card shimming works
Credit card shimming works by inserting a small device called a “shim” into a card reader. Unlike skimmers—which were typically bulky and easily detectable if you knew what to look for—shims are small and subtle.
Whenever a chip-enabled card is inserted into the reader, the shim collects its data. Then, the scammer collects this data by inserting what looks like a regular card into the reader. This makes it difficult to spot suspicious activity, as it appears the scammer is making a regular transaction.
As the technology currently stands, scammers aren’t able to create an exact duplicate of chip-enabled cards based on the shimming data they collect. They are, however, able to create a version of the card with a magnetic stripe only—which many retailers still accept.
How to spot a credit card shimmer
It can be quite difficult to spot a credit card shimmer or skimmer, but there are key questions to help you determine your risk at any transaction:
Does the card slot look misaligned?
Does it take more effort to insert your card?
Does the credit card reader move around when you touch it?
Does it look like anything is blocking the credit card slot? Has something already been inserted?
Are the buttons on the card reader hard to push?
Does anything about the reader look unusual (colors, font, etc.)?
Is there security tape on the card reader? Is it broken or tampered with?
If you’re doubtful about whether an ATM has been affected, it’s best to try another ATM or go to a bank teller if possible. If you’re unsure about a transaction, consider paying in cash or using a contactless payment method, such as your mobile device’s virtual credit card wallet.
How to keep your card secure
While identity theft is not always avoidable, there are some habits you can incorporate to make sure you’re as protected as possible.
Consider contactless payment. The best way to protect against skimmers that steal your card information is to simply avoid them altogether. Contactless payment—like Apple Pay, Android Pay and Google Pay—make paying simple and streamlined.
Choose your ATM strategically. Only use ATMs that are in high-traffic areas or banks to reduce the chances of them being compromised.
Check for tampering. Wiggle the card reader or slot before inserting your card. A traditional skimmer will come off. If your card doesn’t go into the slot smoothly, this could be a sign of a shim inside. Consider choosing a different ATM.
Be cautious at the pump. If you choose to pay at the pump, choose a pump that is closest to the store and in direct view of an employee. If you’re skeptical, the safest option may be to pay the attendant inside.
3 action items for victims of shimming
Banks have some fraud detection technology in place that may catch suspicious activity before it becomes problematic, but it doesn’t catch everything. Luckily, the Fair Credit Billing Act says you’re not responsible for any unauthorized charges once you report your card as stolen. So, if you suspect you’ve fallen victim to skimming or shimming, you’ll want to act swiftly.
Contact your credit card issuer right away. They’ll cut off card access and send you a new card if needed.
Call the business where you think the shimming happened so that they can check their card readers for signs of tampering.
Alert your local law enforcement and the Federal Trade Commission. They may be able to notice a wider pattern and stop other consumers from becoming victims.
FAQ
How does credit card shimming work?
Shimmers are devices that scan the chip in credit cards to replicate and store financial data. Someone can use this to create a knockoff of your card and sell your financial information.
What’s the difference between skimming and shimming cards?
Credit card skimming and shimming are both activities that lift the financial information from your credit card, but they target different places where the information is stored. Credit card skimmers target the magnetic strip on traditional credit cards, while shimmers target the chip you’ll find in newer credit cards.
Can chip cards be shimmed?
Chip cards can be shimmed because shimmers target chips specifically. As of the writing of this article, contactless payments are the most secure way to use your cards.
What do card skimmers look like?
Card skimmers and shimmers are made to look exactly like the regular ATM or card reader. Look for signs of poor craftsmanship or misalignment in the credit card slot because this means it may have been tampered with.
Taking extra safety precautions may seem like a burden at first, but protecting your finances is worth the effort. Remember to pause before you make any transaction to ensure the conditions are safe, even if you’re in a hurry.
Identity theft and fraud can temporarily wreak havoc on your credit, but the effects don’t have to be permanently devastating. Work with a credit repair firm to help challenge any inaccurate items caused by a scammer to help you work to get your credit back to where it should be.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Reviewed By
Sarah Raja
Associate Attorney
Sarah Raja was born and raised in Phoenix, Arizona.
In 2010 she earned a bachelor’s degree in Psychology from Arizona State University. Sarah then clerked at personal injury firm while she studied for the Law School Admissions Test. In 2016, Sarah graduated from Arizona Summit Law School with a Juris Doctor degree. While in law school Sarah had a passion for mediation and participated in the school’s mediation clinic and mediated cases for the Phoenix Justice Courts. Prior to joining Lexington Law Firm, Sarah practiced in the areas of real property law, HOA law, family law, and disability law in the State of Arizona. In 2020, Sarah opened her own mediation firm with her business partner, where they specialize in assisting couples through divorce in a communicative and civilized manner. In her spare time, Sarah enjoys spending time with family and friends, practicing yoga, and traveling.
Looking to turn your home into a cozy and stylish haven? We’ve got a delightful surprise for you! Prepare to be amazed as we unveil a curated collection of 30 home decor treasures that will elevate your space. From incredibly lifelike artificial plants that bring nature indoors with zero maintenance, to luxurious blankets that add a touch of elegance to your living room, and oh-so-comfortable chairs that beckon you to relax after a long day—this incredible assortment is like investing in a beautiful and comfortable future. With these unique finds from Amazon, you can create an inviting atmosphere that will make your guests wonder how you managed to find such amazing pieces.
Review: “This set was pretty quick to throw together with an extra pair of hands. Everything came securely wrapped and well protected. Perfect budget friendly set!” – jrenken88
amazon.com , jrenken88 Report
Review: “I did not expect the sturdiness that this stand has. It is absolutely beautiful once it’s finished. The wood is thick, there’s nothing flimsy on this thing. The actual fireplace has kept my living room toasty. And this weekend our heat just isn’t keeping up, so I’m so glad it came when it did. We’ve kept the heat on for the whole day and all night before heading to bed and it seems like this thing is quality. The shelves are so deep, I can fit multiple game units and our surround sound w out it looking cluttered. And of course my 4 year old enjoys the different color light show lol. Honestly it upgraded our living room. The tv shown is a 65”, and there’s a lot more space around it and in front of it. Our old stand was half the size holding this tv so really this is an amazing upgrade for us. I’m really in love w the quality and how modern this is. Probably the best thing I’ve bought on amazon. Now my only con. Took me forever to put it together… I had a 4 year old distracting me tho. But there’s ALOT of boxes within boxes and ALOT of styrofoam. I mean a lot lol. So be ready to have a major clean up. Otherwise I would totally recommend this stand. Absolutely gorgeous” – Jujubean
amazon.com , Jujubean Report
Review: “This is a beautiful bust. I have been buying a lot of things to decorate my Latin classroom with and, normally, when the items are this intricate, they are also small, but this busy is both intricately detailed and large. It was actually quite a bit bigger than I expected, but fits beautifully with the rest of my classroom decor. This is, perhaps, the center piece of my classroom.” – Tad
amazon.com , Tad Report
Review: “Ordered it after looking at many more expensive options in the furniture stores, ready to return it if we felt it was lower quality and cheap looking. Arrived today and after a simple assembly we feel it is perfect…very elegant and very sturdy. Replaced the supplied bulb with a smart led and we can now control brightness and color with voice commands. A+” – Flamethrower
amazon.com , Flamethrower Report
Review: “These shelves were perfect for my accent wall in my dining room. They are super easy to hang. I was able to hit the studs for both hooks because they placed them in the right location on the shelf. They are truly authentic with nail holes and even a nail. So cool. 7” is plenty of depth to put accessories on. Worth the money.” – K.Ryan
amazon.com , K.Ryan Report
Review: “This lamp was a great complementary piece for our boho style living room. The natural shade added the perfect touch. It fit well next to our sofa . Great looking lamp for an affordable price . Totally on trend . Good vibe . ” – Amazon Customer
amazon.com , Amazon Customer Report
Review: “This was a great buy. Just what I had been looking for, it’s very sturdy with a slight bit of weight but, not heavy by no means to handle. I’m glad I got it. You won’t be disappointed. The seller definitely did an awesome job on this one and it was packaged very very well and delivered with care. Now to decide where to put put because I want to hang it up on my wall.” – BB
amazon.com , BB Report
Review: “I have bought so many things on Amazon and I do get let down often. This tree exceeded anything I thought I would be getting. The details are perfection. The material is perfection. It came in perfect condition. I simply took it out of the box and placed it in the planter I bought for it then fluffed out the leaves. It was so easy to do by myself. The leaves look so green and real like trees I’m used to in Florida but they don’t grow where I live now. Plus it smelled good. Not like a perfume or anything just clean. – Ciscojrmpswife
amazon.com , Ciscojrmpswife Report
Review: “I am shocked by the value and quality! The Amethyst has a rich purple color and is more than a value, more than! I highly reccomend it!” – Odalisque
amazon.com/ , Odalisque Report
Review: “This rug is perfect for my closet. Stylish, cozy and soft on bare feet yet thin enough for my chair to roll over. Does not slide or shed (as stated in other reviews) and vacuums up well. Have not washed it yet but definitely a great buy!” – Tina
amazon.com , Tina Report
Review: “I wanted something to accompany the 50th Wedding Anniversary Card that I got for my wife. There would be plenty of real flowers, a family celebration and many gifts. I wanted something simple yet permanent that would stand out in our already filled China Cabinet. This is perfect. It doesn’t take much space. It is very well done, solid yet delicate. Attractive well made box for storage if need be. It will soon be added to our life-long precious collectibles and will hold its own.” – WallyH
amazon.com , WallyH Report
See Also on Bored Panda
Review: “I ordered this rug in the Grey/Brown color option. It is perfect for tying my brown wood furniture and dark grey floors together. It is also a great color/pattern combo for hiding any little spills my toddler or dog might have. The thickness is enough that it is comfortable and padded underfoot, but not thick enough for a lot of crumbs, dirt, hair, etc. to get stuck in the fibers. It definitely can be vacuumed easily. Overall I am very happy with this purchase and buy this rug again for other rooms! The picture shows the rug right out of the bag, so the side is still a little curled. After an hour or so it is already flattening out.” – Scott Hammock
amazon.com , Scott Hammock Report
Review: “Loved that they came in a set, so you know they’re going to be identical. Wonderful size. Tall. Perfect. Note. In order to get the leaves to look like the ad picture: when installing, the leaves are in various sizes and you can put them wherever you’d like. Smaller on the bottom, larger on top, works best. Alternating colors. Initially, they stick straight up. To get the curved look, roll the “leaves” by hand. Do not try to bend the wire between the leaf and the stem. They really do look quite real” – Good
amazon.com , Good Report
Review: “I love this screen. We placed it on our deck for a privacy screen and love it. It is a very versatile screen and I have used it in several places in the house as well. It looks great on the deck as you can see. I ordered 30″ zip ties when I ordered the screen and have used the zip ties to gently secure the screen to the deck posts for windy days. I want to order another!” – Buckleysangel
amazon.com , Buckleysangel Report
Review: “I had a great TV stand that I really liked because it was open. I decided to order this one because the top was going to raise the height of the tv. At the last minute I decided NOT to add the back & the doors so that it would be exactly like the previous one, so I wanted a buyer to know you can leave off the back & doors if you choose & it looks great. When I get bored I change things often, so if I decide to add the back & doors it will be like a different piece of furniture. I am so pleased with this purchase.” – Robinette Fields
amazon.com , Robinette Fields Report
Review: “I was very apprehensive because it was only a two ounce candle pretty small but wow it’s mighty. I understand the price now. I’m going to say buying the 8oz version is going to be totally worth it because this candle lasts a while and you don’t need to leave it on for long and the smell will Permeate the entire area and it’s very strong. I would also say this is a great gift for anyone and especially for a masculine man.” – That One Girl
amazon.com , That One Girl Report
Review: “The quality of these shelves is awesome. And, they are so easy to put together! I chose to get the adjustable option so I could customize my shelves. I chose to leave one shelf out to have a bit more room. And, the price point is right in line with the quality in my opinion.” – Heather Lowery
amazon.com , Heather Lowery Report
Review: “Very realistic. Soft. Very lux looking. True to color. Great size for the sofa. I have yet to clean this but my hunch would be to avoid tumble drying. I purchased primarily for the look. Not to actually use as a blanket. So far no shedding. I’m in love with this throw. Excellent accessory to mark the cold season. BUY IT! – Markita
amazon.com , Markita Report
Review: “These three coffee tables are so beautiful and came in much larger than I expected. It really fits in a large living room. The install was straightforward but due to the arch we had to spend sometime lining the holes up. I love these coffee tables in the living room!” – Janice
amazon.com , Janice Report
See Also on Bored Panda
Review: “Got two of these for dorm room and was pleasantly surprised by the weightiness of the mirrors. It is a solid, sturdy piece and I feel confident it will still be standing at the end of this school year. They look great in the room!!” – Kat
amazon.com , Kat Report
Review: “I bought the 30” and 40” bottle to fill in space next to my entertainment center in the living room. I was pleasantly surprised when they arrived. They were very well packed and when I unpacked them , they were very sturdy and heavy. I loved the look of the recycled glass. – Terry A Stiles
Mortgage rates managed to have a nice, boring Friday with minimal movement. That’s a victory considering yesterday saw a decent move lower, but victories are eternally tempered by the long term chart as long as the long term chart looks like this:
Not a fun chart, but look at it this way: the higher we go, the closer we are to the top. That may sound like a meaningless platitude, but there’s a real kernel of logic behind it.
We know that the Fed hikes short term rates (which filter through to longer-term rates like mortgages) in order to crimp economic demand and bring prices lower. In that sense, higher rates do indeed bring about lower rates.
This is an interesting and important time for that thesis, as a matter of fact. In the past few weeks, the Fed has increasingly flagged the sharper rise in longer term rates as evidence that it doesn’t need to hike short term rates anymore. The Fed has also said it is hearing talk of economic softening that’s not yet showing up in the data.
This comes at a critical moment for a few reasons. First off, longer term rates actively bounced against an important ceiling over the past two weeks. The following chart shows it in terms of 10yr Treasury yields, the most commonly used benchmark for longer-term rates.
While the chart is labeled with 4.99, this is really about the big psychological impact of “5% Treasury Yields!” Some investors think that’s an attractive entry point to buy bonds. Others simply think it’s a big psychological level and thus time to get sideways before the next big dose of motivation arrives.
That brings us to the next few reasons for the critical timing. The next big dose of motivation stands a very good chance to be arriving in the coming week. Here’s why:
We’ll get all of top tier economic data typically seen on the first week of any given month, including the exceptionally important jobs report on Friday.
We’ll hear from the Fed itself on Wednesday when the latest rate announcement comes out
We’ll see updated borrowing amounts from the U.S. Treasury for upcoming Treasury auctions (this informs rate momentum by changing the supply/demand equation).
The Fed is all but certain to leave rates unchanged on Wednesday. Moreover, given the abundance comments over the past two weeks, it might be hard for the statement or Powell’s press conference to offer much by way of new ideas. Nonetheless, markets will be listening closely for more clues or confirmation about last week’s ideas.
The data is of the utmost importance. If it does anything to confirm the anecdotal signs of economic softening mentioned last week, it could strongly reinforce recent rate ceilings. It’s a double-edged sword, however, because if the data is strong enough, it could easily lead investors to explore 10yr yields in the 5% range. In that scenario, the average top tier mortgage rate would have a hard time staying out of the 8%+ range.
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
By 2028, women are projected to own 75 percent of discretionary spending in the United States. [Nielsen]
Considering women make up 51 percent of the U.S. population, female consumer trends have a strong influence on the economy. Collectively they make up a sizable growth market that can’t be ignored.
Women are increasingly invested in the quality of the items they buy and how well they fit their lifestyle. Since they’re more likely to shoulder the responsibility for things like household purchases, grocery shopping and meal preparation, convenience is a high priority in women’s spending habits and something they seek out in their everyday lives.
Businesses that fail to understand the unique characteristics of female consumers are ultimately losing out on a valuable market. Greater effort will be required to keep up with the evolving consumer landscape that is driven largely by women. By analyzing the statistics associated with women’s spending habits, we can gain insight into their preferences, values and thought processes when it comes to what and how they buy. Read on to learn more.
Note: We reference the most updated data available, but sometimes that information is from several years ago—check each individual source for specifics.
Table of contents:
An overview of female consumer trends
The impact of female consumerism in the U.S. is hard to understate, as they make the majority of all consumer purchases. This could be attributed to the fact that women often buy not only for themselves but also for their families and children.
With women leading the majority of household purchases, retailers could benefit from focusing on how they can best serve the vast number of female consumers who stimulate their sales year after year.
By 2028, women are projected to own 75 percent of discretionary spending in the United States. [Source: Nielsen]
Women make 91 percent of new home purchases. [Source: Girlpower Marketing]
An average of 89 percent of women across the world reported controlling or sharing daily shopping needs, household chores and food prep compared to an average of approximately 41 percent of men. [Source: Nielsen]
Women are the primary purchasers of everyday household items. [Source: Nielsen]
61 percent of women in the U.S. believe that they are worse off or about the same compared with five years ago when it comes to finances. [Source: Nielsen]
67 percent of women in 2019 were employed for pay. [Source: Civic Science]
Men’s vs. women’s spending habits
There are often notable differences between the minds of men and women, including what motivates them when it comes to their spending habits. While neither gender can be placed in a box and a broad range of characteristics exist for each, there are general patterns that can shed light on their financial lives and choices.
The answer to the question “Do women shop more than men?” is a bit complex. Women are often far more selective in their purchases than men and are willing to spend the time necessary to find products that fit their needs and requirements. While men are usually more straightforward and goal-oriented in their shopping, women are more detail-oriented, paying attention to the quality of an item before purchasing. The majority of men prefer to get in and get out of a store as quickly as possible, while women generally enjoy the shopping process as a whole.
Female buying behaviors indicate that they want a risk-free and convenient shopping experience, which goes hand in hand with their desire for their purchases to enhance their lifestyles. They frequently prioritize ensuring that their purchases check every box and fulfill their needs, and usually spend more time than men making sure of this before spending any money.
43 percent of women and 52 percent of men prefer making technology purchases online. [Source: First Insight]
74 percent of women report finding items on sale matters to them in their purchasing habits, compared to just 57 percent of men. [Source: Belvg]
34 percent of women report caring about applying coupons and promotions to their purchases, compared to 26 percent of men. [Source: Belvg]
14 percent of women are inclined to study promotional emails, compared to only 8 percent of men. [Source: Belvg]
58 percent of women report checking products and prices on Amazon.com before looking elsewhere, compared to 64 percent of men. [Source: First Insight]
42 percent of women are encouraged to buy online if free delivery is included, as opposed to 35 percent of men. [Source: Nielsen]
91 percent of women buy food and groceries in-store, compared to 86 percent of men who do the same. [Source: First Insight]
Women are 48 percent more likely to use reusable shopping bags than men. [Source: Civic Science]
30 percent of women are encouraged to shop online if they receive text or email updates on product availability, as opposed to 27 percent of men. [Source: Nielsen]
42 percent of women are encouraged to buy online when the purchase includes a money-back guarantee, as opposed to 31 percent of men. [Source: Nielsen]
67 percent of women examine food labels to determine if a product is healthy, while only 48 percent of men do the same. [Source: Nielsen]
Women are 13 percent more likely than men to deem a product premium based on whether it contains high-quality ingredients. [Source: Nielsen]
Slightly more women than men prefer to shop online at 72 percent, compared to 68 percent of men. [Source: Belvg]
Online vs. in-store shopping habits
While the digital shopping landscape continues to grow more robust and popular with each passing year, women are still making more in-store purchases than they are online. However, even though women consumers are more inclined to spend more in-store, they aren’t as inclined to visit a store in person unless they have a specific purchase in mind. Retailers can capture this opportunity by making sure they’re offering the exact products women are specifically searching for when they visit a store.
72 percent of women shop online. [Source: OptinMonster]
When shopping online, 77 percent of women say they add extra items to their carts that they didn’t originally intend to purchase. [Source: First Insight]
Adding extra unplanned items to their cart is more common among in-store shoppers, with 89 percent of women saying they sometimes or always do so when shopping in person. [Source: First Insight]
69 percent of women choose in-store shopping when they need something specific. [Source: First Insight]
56 percent of women choose online shopping when they have a specific need for something. [Source: First Insight]
70 percent of women usually spend $50 or more when shopping in-store, compared to only 49 percent who spend more than $50 when shopping online. [Source: First Insight]
33 percent of women spend over $100 during an average in-store shopping trip, while only 17 percent say they spend over $100 when shopping online. [Source: First Insight]
91 percent of women buy food and groceries in-store. [Source: First Insight]
47 percent of women shop on eBay, and 80 percent of women use Etsy. [Source: RepricerExpress]
46 percent of women shop for clothing and sporting goods online. [Source: Belvg]
25 percent of women purchase books, magazines and learning materials online. [Source: Belvg]
10 percent of women buy medicine online. [Source: Belvg]
35 percent of women spend on travel and holiday accommodations online. [Source: Belvg]
30 percent of women purchase household items online. [Source: Belvg]
26 percent of women purchase event tickets online. [Source: Belvg]
16 percent of women buy music or movies online. [Source: Belvg]
What consumer goods are women buying?
With data pointing to women as most often responsible for the majority of grocery shopping and meal preparation, the food industry represents a significant opportunity for companies to find ways to connect with their female consumers.
Women also spend significant amounts on beauty products, clothes and travel. With clothing ranking as a top spending category among women, the continued evolution of the retail world represents a chance to lean further into the habits of women consumers.
Beauty and skin care spending
Women have historically spent a considerable amount on personal care, cosmetics and skin care, and it’s no different today. While makeup and beauty products aren’t a part of every woman’s routine, almost everyone uses some type of skin care product—even if it’s just sunscreen or hand lotion. This sheds some light on the astonishing size and increasing growth of the skin care market, particularly among women.
While older consumers used to lead the demand for products in these industries, an increasing number of younger women now play a significant part. This could explain the shift in the market, indicating women’s increasing desire for more natural and organic products, which continues to go up as consumers become more knowledgeable about toxic ingredients in their products and factors like sun damage. Cosmetics and skin care brands that recognize these emerging values among their consumers will outgrow those that don’t.
The global skin care industry is estimated to reach $189.3 billion in the U.S. by 2025. [Source: Statista]
Natural cosmetics had a global market value of $34.5 billion in 2018, and are expected to increase in value to $54.5 billion by 2027. [Source: Statista]
Women who spend money on their appearance will spend roughly $225,360 in a lifetime. [Source: OnePoll]
When it comes to beauty-based purchases, women spend the most on facials, haircuts, makeup, manicures and pedicures. [Source: OnePoll]
Women spend $91 a month on facial products. [Source: OnePoll]
The fragrance industry will reach an estimated $91.17 billion globally by 2025. [Source: Health Careers]
Women in their 30s buy more anti-aging products than women between the ages of 40 and 60. [Source: OnePoll]
Women in their 20s make more makeup purchases than any other age group. [Source: OnePoll]
Household and grocery spending
Data shows that women do the majority of household spending, grocery shopping and meal preparation. With women generally spending more time on household duties than men, it’s no surprise that much of their spending is allocated to these categories.
Women are twice as likely to take charge of household grocery shopping than men. [Source: Civic Science]
80 percent of women who have children and live with a spouse or partner say they are typically in charge of meal prep. [Source: Pew Research]
75 percent of women without children who live with a spouse or partner say they are typically in charge of meal prep. [Source: Pew Research]
80 percent of women who have children and live with a spouse or partner say they are typically the grocery shopper. [Source: Pew Research]
68 percent of women without children who live with a spouse or partner say they are typically the grocery shopper. [Source: Pew Research]
Women spend more money per grocery shopping trip than men, averaging $44.43 per trip. [Source: Nielsen]
Clothing spending
Clothes have always been a large category of spend among women. The market value for women’s retail is expected to rise to around $394 billion by 2025, and retailers are becoming more aware of what women want in their clothing. They value versatility and functionality without sacrificing function and utilize their fashion choices as a source of empowerment and confidence.
Growth in the retail industry among women could be due to the fact that economically empowered female consumers who maintain the majority of control of spending in American homes have more purchasing power, much of which continues to be allocated toward clothes.
Digital trends are also impacting women’s shopping habits, and almost three-quarters of women now shop online. Women are increasingly utilizing social media platforms for fashion discovery, product inspiration and finding authentic reviews from their peers online.
On average, the clothes in a woman’s wardrobe equal between $1,000 and $2,500. [Source: CreditDonkey]
9 percent of women have over $10,000 worth of clothing in their closet. [Source: CreditDonkey]
32 percent of women in the U.S. own over 25 pairs of shoes. [Source: CreditDonkey]
Over half of women estimate that 25 percent of their wardrobe goes unworn. [Source: CreditDonkey]
Every three months, 73 percent of women refresh one quarter of their closet. [Source: CreditDonkey]
Around 15 percent of women don’t have clothes older than five years old in their closet. [Source: CreditDonkey]
Women who are 16 and older spend an average of 76 percent more on clothing than men every year. [Source: CreditDonkey]
Women between the ages of 45 and 54 spend $793 per year on clothing, the highest spent of any age group. [Source: CreditDonkey]
75 percent of women over 18 would choose Target for undergarments over Victoria’s Secret. [Source: Civic Science]
Women’s purchasing values
Diversity and inclusion factors have a larger impact than ever on women’s shopping decisions and expectations. With diversity and inclusivity growing increasingly important in the world of retail and beyond, women consumers expect brands to evolve with the cultures they serve. Among women today there is more scrutiny of brands’ and retailers’ values, hiring practices, product-to-market placements and ability to truly listen to their customers.
Women, like all people, are driven by their values and habits, so understanding what’s important to them, what their day-to-day lives look like and what makes them unique is crucial in fostering a true connection that might influence purchasing behavior.
About half of women in the U.S. believe that having minority-held leadership positions is important and believe that retailers would benefit from hiring Chief Diversity Officer positions. [Source: First Insight]
45 percent of women say cultural inclusivity in brands is important. [Source: First Insight]
44 percent of women believe it’s important for influencers to represent diverse points of view. [Source: First Insight]
67 percent of women say that inclusivity in extended sizing is the top diversity factor to consider. [Source: First Insight]
55 percent of women in the U.S. say they would temporarily stop shopping at a brand or retailer who released an offensive product. [Source: First Insight]
71 percent of women believe brands and retailers should make it at least six months without any offensive items released before they would feel comfortable purchasing from them again. [Source: First Insight]
Opportunities for financial success
Women who are active in their own financial planning are less stressed on average than those who avoid it. There are many ways to prioritize financial success such as committing to your retirement savings, learning investment strategies and managing your personal credit and debt.
Managing credit card debt or poor credit is an important starting point on the road to financial success. Taking responsibility for debt or bad credit will help you secure a more prosperous financial future, and utilizing the help of a credit repair team could help you manage the process. If you are a woman moving toward financial independence, know that it’s never too late to take steps toward a brighter financial future.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Reviewed By
Sarah Raja
Associate Attorney
Sarah Raja was born and raised in Phoenix, Arizona.
In 2010 she earned a bachelor’s degree in Psychology from Arizona State University. Sarah then clerked at personal injury firm while she studied for the Law School Admissions Test. In 2016, Sarah graduated from Arizona Summit Law School with a Juris Doctor degree. While in law school Sarah had a passion for mediation and participated in the school’s mediation clinic and mediated cases for the Phoenix Justice Courts. Prior to joining Lexington Law Firm, Sarah practiced in the areas of real property law, HOA law, family law, and disability law in the State of Arizona. In 2020, Sarah opened her own mediation firm with her business partner, where they specialize in assisting couples through divorce in a communicative and civilized manner. In her spare time, Sarah enjoys spending time with family and friends, practicing yoga, and traveling.
In the U.S., apartments are getting smaller and smaller, meaning you might need to downsize your new home. On average, studio rentals are about 530 square feet. Efficiency apartments sit on the smaller side of this spectrum.
Shrinking apartments are likely the result of rising costs per square foot for rentals, but we’re learning to adjust. Many now look for smaller apartments on purpose, ready to give up having a separate bedroom for the benefits of living a little smaller.
While many begin their petite apartment hunt looking for a studio, it’s best to not discount an efficiency apartment. Efficiencies are like studios, but not exactly the same. However, they may be the perfect choice for your budget. Here’s what you need to know about renting an efficiency.
What is an efficiency apartment?
An efficiency apartment consists of only two separate spaces. Efficiencies combine all your traditional living spaces, except for the bathroom, into one room. Your bedroom, living room and kitchen won’t have built-in partitions.
The only doors in an efficiency apartment are the one leading into your bathroom and the one going out of the unit completely. There are many benefits of an efficiency apartment:
Tiny but mighty
Yes, they’re small and compact, but they don’t have to lack luxury. For too long, people associated small apartment size with a living space that felt cheap or poorly maintained. Actually, efficiency apartments vary in quality like any other apartment size.
It’s more about how much you pay in rent that determines how nice a place is, not the number of square feet. In some cases, you can even get more amenities by renting an efficiency in a nicer building instead of a larger apartment somewhere else.
Easy to clean
Another perk of the size of an efficiency is how easy it is to clean. With minimal square footage and only one bathroom, you can have your apartment sparkling in no time. A pack of disinfectant wipes and a broom may even be enough to do the trick, allowing you to keep valuable storage space open for things other than cleaning supplies.
Budget-friendly
Efficiency apartments are also your most budget-friendly option, in more ways than one. They’ll cost you less, on average, in rent than any other sized apartment, but that’s not all.
Having a smaller apartment means lower utility bills. You’ll have fewer rooms to light, heat and cool. Living alone means you’ll use less water, too. On average, the price of utilities in an efficiency is between $100-$150 per month. You could pay that much heating a one-bedroom apartment in the dead of winter alone, not to mention the cost of your other utilities.
Living in an efficiency apartment can allow you to cut a little bit from all your monthly bills. This can add up to some significant savings over the course of a year.
Going solo
Because of the size and layout of an efficiency apartment, you’ll most likely be living alone. There’s really no way to accommodate a roommate. You could share with a significant other, but understand that you’ll have no personal space.
Efficiencies might even feel too cramped to share with a pet. When looking for an efficiency, it’s best to fly solo.
What do efficiency apartments look like?
While the specifics will vary, efficiency apartments look like one big room and a bathroom. The kitchen is often along a wall, galley-style to stay out of the way. You may or may not get a closet, but it’s up to you to create natural divisions in the space with your interior design.
Source: Rent./Post Centennial Park
Living with a kitchenette
In addition to cramming everything but the bathroom into a single room, you may lose a little when it comes to your kitchen. Efficiency apartments may have a kitchenette, instead. By definition, this is a smaller version of a kitchen.
You may not get a full-sized fridge, and don’t expect a dishwasher. With limited space, you can lose a few appliances common in bigger apartments. However, hand-washing dishes for one isn’t a big job, and portable dishwashers do exist.
What’s the difference between a studio and an efficiency?
There’s really not a square footage difference between a studio and an efficiency apartment. It’s all about the layout when differentiating. You’ll know right when you walk into a prospective apartment whether it’s a studio or not.
“Whether you prefer to call it a studio or efficiency apartment,” writes Devon Thorsby from U.S. News & World Report, “stay focused on the specifics of the space as you shop for apartments to ensure your definition of the word matches up with the leasing agent’s.”
Even if your definitions don’t agree, if you find everything but the bathroom in a single room, you’re in an efficiency. Studios have more separation. You might not have doors on everything, but you’ll see a natural division in spaces. Your kitchen won’t be in your living room. You may even have a nook to serve as a bedroom.
Where can I find an efficiency apartment?
You’ll find efficiencies primarily in cities where apartments tend to be smaller. New York and San Francisco are prime examples, but availability isn’t limited to those densely populated spots.
If you value location over size, an efficiency apartment in your ideal part of town is a worthy tradeoff. Why move into a large apartment in an outlying neighborhood if you don’t have to? You can spare yourself a long commute, and the sense of feeling distanced from where all the action is, by cutting back on your square footage requirements.
Efficiency listings should pop up in apartment buildings all over, whether you’re looking downtown or in the suburbs. Look for newer construction if you’re having trouble finding units for rent.
Find efficiency apartments today!
Apartment complexes everywhere are acknowledging the benefits of efficiency apartments. Not only are they smaller so more fit into a single building, but they’re attractive to renters looking for affordable options. See if there are any available units where you live.
Lesly Gregory has over 15 years of marketing experience, ranging from community management to blogging to creating marketing collateral for a variety of industries. A graduate of Boston University, Lesly holds a B.S. in Journalism. She currently lives in Atlanta with her husband, two young children, three cats and assorted fish.
MassHousing, a quasi-state agency that helps fund home loans for low- and moderate-income borrowers, has quadrupled the share of people of color who access the group’s funds over the last decade.
That’s according to a new report from Boston Indicators, the research arm of the Boston Foundation, on homeownership support programs in Massachusetts.
The report finds that while 73% of white families in Greater Boston own a home, roughly 40% of Black and Latino families are owners. But report author Luc Schuster said groups like MassHousing have made strides in reaching people of color.
“There really is evidence that these programs are helping to get moderate-income families, disproportionately Black and Latino families, into homeownership,” Schuster said.
The programs involve helping borrowers secure affordable loans and, in some cases, assist with down payments. For instance, Schuster said, a family of four earning $100,000 a year in the city of Boston can potentially buy a first home with aid from MassHousing. But that figure represents a big change from previous years, when families earning significantly less could qualify for loans.
He noted that the fast-rising cost of homes in the area may be offsetting some of the gains in ownership by people of color. For people with lower incomes, buying a home can still be out of reach.
Lending from quasi-state agencies like MassHousing and the Massachusetts Housing Partnership — which issue bonds to raise capital and work with banks that write mortgages — is just a sliver of the overall housing market. But for those who qualify for the loans, it can make the difference between renting and becoming a homeowner.
The Massachusetts Housing Partnership also has made progress in reaching communities of color with homebuying dollars, according to the study. In 2006, half of the group’s first-time borrowers were white, compared with 32% in 2022. “We’ve historically had a diverse borrower pool and have steadily been serving a large percentage” of people of color, the group’s spokesperson Calandra Clark said in an email.
In 2012, only 11% of MassHousing loans went to Black, Latino and Asian borrowers. That’s when officials at the group set a goal that at least half of borrowers should be people of color by 2026, according to Mounzer Aylouche, who leads MassHousing’s homeownership programs. As of this August, he said, the organization exceeded that goal.
But Aylouche said the volume of overall lending is shrinking because homes for sale are in short supply and interest rates have jumped to the highest level in years.
Another challenge for low-and-moderate-income borrowers, Aylouche said, is having to compete with investors from around the country that are looking to cash in on the state’s housing market.
Schuster said the state needs to do a better job informing homebuyers of help that’s available, and more money is needed to expand initiatives like downpayment assistance.
“The racial wealth gap is the consequence of generations of racial discrimination” and redlining by lenders, he said. “But I think it’s important to not go from there to complete pessimism and paralysis. Ultimately, we need to act on many fronts at once.”