A Study of the Local Housing Markets and Pertinent Economic Statistics from the 1990’s through 2009

PH. 303.996.2010

Fax. 303.996.2142

Introduction. The popular press often contains articles describing the state of the national and local housing markets. Many have voiced concern that there is a “housing crisis.” Most of the people reading this will agree. Certainly lower interest rates and relaxed mortgage qualification standards during the bulk of the 2000’s made it that virtually anyone could buy a house. The result was in increase in the demand for homes as people rushed to buy houses they really couldn’t afford. This pushed prices to unrealistic levels. When buyers realized they couldn’t really afford what they had purchased, the next step was a nationwide fall in housing prices and unthinkable foreclosures rates. The question is whether or not the current “crisis” will continue.

We have been publishing our housing surveys periodically since the late 1980’s with the objective of gaining a more in-depth look at the market. Our major accomplishment was in 1991 when we predicted a turnaround in the Denver-metro market at a time when the national press was labeling Denver as one of the worst markets in the country. In 2004 we cautioned that we were in danger of a “housing bubble” that had to burst. Anyone following our recommendations at those times would have been well rewarded for doing so.

What is the Current Inventory of Resale Properties? In order to obtain a measure of the supply/demand balance one of the first questions we need to answer is how many properties are currently on the market and how does this supply compare to previous years. The following chart gives us a graphic representation of current trends. (Chart on following page)

The previous graph shows that we have had a decrease in inventory for the past 2 years. At the end of 2009, we had 4,193 condo/town home properties on the market, which is the lowest number since 2001. Contrasted to the high point of 6,802 properties for sale at the end of 2005, this represents a decrease of 38.4%. The trend for single-family homes is similar; the 2009 number of 12.263 represents a decrease of 34.5% compared to the 2007 level of 18,709.

A quick examination of the above graph shows us that inventory levels have decreased at a steady pace, which seems to be favorable for the market; however, there are other factors to consider before jumping to the conclusion that the market is approaching recovery.

Marketing Time. Over the years, we have been cautioned that the average length of time required to market a given property is not reliable due to the fact that not all agents report these statistics in the same manner. While, we do not rely on absolute accuracy of these numbers, we have found that, when compared to each other, the numbers show trends that are indicative of the overall health of the market. A plot of the past 20 years is as follows:

This chart shows that marketing times have started to decrease, however slightly, for both single and multi-family properties. The shortest amount of marketing time for both property types was 2000 with only 38 days for single-family and 32 days for multi-family properties. Contrast that to last year in which 97 days was required to sell a single-family property and 101 days were required to sell a multi-family unit. Again, this statistic represents a downward trend, with both property types requiring slightly less marketing time. Decreasing inventory coupled with a slight decrease in marketing time could be encouraging news. This information may be more meaningful when considered with other data.

Sales Trends. The ideal situation occurs when decreasing inventory is accompanied with strong sales data. If decreasing inventories are accompanied by lower sales levels, it is more difficult to predict the consequences. The following chart shows sales trends over the past 20 years.

Between 1990 and 2004, we had a fairly steady increase in our marketplace activity. But since 2004, when market activity was at its peak, we have had a decline in our metro Denver home sales. Last year single-family sales dropped to 33,114 homes, a decrease of 22% from 2004 levels. Similar trends exist in the condo/townhouse market with 8,956 units sold, a decrease of 25% from 2004 levels. The lower number of sales tends to offset the decreases in inventory and marketing time of the previous two years. Combining these statistics to determine how long the present supply would be expected to last at the current sales levels might help us obtain a more accurate picture of the health of the market.

Months Supply. One way of looking at supply and demand on the same chart is to determine how long the current supply would be expected to last given no change in the rate of sales. Fortunately, dividing 2009 total sales by 12 and dividing the end of the year inventory by the monthly sales levels allows us determine this relatively easily. In the case of single-family properties, the monthly sales level is 2,759. Dividing inventory levels of 12,263 by this number indicates that the year-end supply would be expected to last 4.44 months. This number has not changed that much as compared with 4.22 months supply in 2004. In contrast, the current multi-family sales of 746 per month are indicative of a 5.62-month supply. The following chart shows these supply trends over the past 20 years.

It is interesting to note that the supply of single-family homes at the end of 2007 was identical to that of 1990, 5.78 months supply, which occurred as a result of the housing recession of the late 1980’s. The sales market in 2009 reduced that supply level to 4.44 months. The multi-family market will probably never approach the oversupply level of 1990; however, it hasn’t had to in order to constitute a crisis. In 1990 and the years just prior, condo/townhome units were virtually un-saleable and those that did sell were at drastically reduced prices, sometimes as low as 70% off the previous sale price. Much of the condo/townhome supply that existed at the end of 1990 was rapidly absorbed, mostly by investors, as condo sales increased by 121% in 1991.

Based on the supply/demand data, it appears that we could be on the verge of stabilization in our housing market. One more factor to be considered is the rate of increase or decrease in housing prices over this same period.

Housing Prices. This past year continued a 3-year period in which prices decreased steadily. The average single-family home decreased from $317,112 in 2006 to $264,803 in 2009, an overall decrease of 16.5% or 5.83% compounded per year. The increase in home prices from 1990 to 2006 was 309% viewed as an annual compound rate; the increase was 7.3% per year. Multi-family units decreased from an average of $189,362 in 2005 to $159,628 in 2009, an overall decrease of 15.7% and a compound decrease of 4.18% per year. Looking back at the rate of increase from 1990 through 2006, these rates of increase were considerably above that of the increase in inflation over the same time period as well as the increase in personal income levels. This was an unsustainable rate of increase, violating an old economic premise that no item can increase in price at a rate above the rate of increase in income without becoming totally unaffordable. The reasons that this rate was sustainable for so long was the decreases in interest rates coupled with the fact that price increases came on the heels of a very large bust cycle from 1985 to 1991. This market correction, even though it has affected all of us, is healthy. Increases in housing prices had to slow to match the slower increases in income.

I should also call your attention to the fact that, while these increases in the average sale price may have been related to how fast your home increased in value, they aren’t absolutely correlated due to the fact that average home sizes were increasing as were the amount of amenities included in new housing. Another factor was the number of additions to existing housing stock in popular neighborhoods along with “scrape-offs,” where modest homes were replaced with those of much larger sizes and increased amenities. The effect of this factor is difficult to quantify; however, our twenty years of experience in this area indicates that, considering the overall market, increases in average home size and amenities was not a major factor in the overall market. Now we need to look closer at price trends.

While the increased supply and unsustainable price increases of the mid 1990’s through the mid 2000’s indicated that there was indeed a real estate bubble, we are reminded of a statement once made to the effect that economic data has been a valid predictor of three of the past five recessions. “Attempting to predict the future from historical data is like attempting to drive your car forward by looking in the rear view mirror. It might work for a short distance but you will almost certainly make many wrong moves over a long trip.” In an attempt to put these historical trends into perspective, it is valuable to view these in context with some statistics regarding the health of the local economy.

Building Permits. One factor strongly influencing the housing markets is the number of new properties being constructed. In the Metro-Denver area between 1995 and 2007, an average of 13,996 new building permits were issued each year. In contrast, the building permits issued in 2008 were only 4,338 and in 2009 they were a measly 2,258. This is some of the best news when it comes to the overall marketplace. The decrease in building permits has allowed absorption of some of the excess supply in the market. This compounded with the still historic low interest rates and the tax benefits offered for home purchases have allowed the market to stabilize more quickly than first anticipated. The following chart shows building permit trends since 1995.

The most noticeable item in the chart is the decline in single-family building permits from a high of 12,373 in the year of 2005 to 1,787 in 2009. This is forecast to remain at the same level in 2010. While some of the credit for limiting building permits has to be given to the local governments, most of the reason for the slowing is the relative high price of land and building supplies coupled with the inability to sell already completed projects. Another factor is the overall economic health of the country that has seen increases in builder bankruptcy and the inability of remaining builders to obtain favorable financing for new projects.

Employment Trends. During 2009, the metro area experienced actual job losses for the first time since the mid-80’s. Most of the jobs lost were in high paying sectors where the average annual salary was $78,750 per year. Quite a few of these jobs are lost for good. Many losses were the result of companies that went public and raised huge sums of money. After hiring a staff of highly paid employees and going through the entire proceeds from the stock offering, they were forced to go bankrupt and leave employees, stockholders, creditors, and landlords holding the bag. In order for job growth to resume, those lost jobs have to be replaced with growth from other sectors, likely at a lower pay rate. Although exact 2009 figures are not readily available at this time, the presumed unemployment rate for the end of 2009 in the metro area was 6.7%, which is staggering as compared to just one year earlier at 4.9% or that of 2007 at 3.9%. Still, as compared to the national average for 2009 of 9.3% the metro area is not as bad as other parts of the nation.

This chart shows us that employment growth outran population growth for all but six of the past 20 years, an obvious sign of a healthy economy. Exact 2009 statistics are not readily available as of the time of this survey. We need to look at 2001 through 2003 and most disturbing 2008, in which population growth continued as jobs decreased, a trend that cannot possibly continue without a drastic reduction in living standards for the average resident. The effect on the housing market was an increased demand due to larger population coupled with decreased affordability due to lower compensation per worker, an undesirable combination.

The next chart shows the Denver-Metro area’s actual employment change vs. the unemployment percentage from 2000 through the end of 2009. The past decade started off in good shape in 2000 with the unemployment rate at 2.7%. The rate quickly rose to 5.7 % in 2002 and 6.1% in 2003. The unemployment rate steadily decreased in 2004 thru 2007 where it reached a favorable 3.9%. The unemployment rate topped out in 2009 at 6.7% but still a far cry from the national average of 9.3%. Unfortunately, the unemployment rate of 6.7% added to the fact that the actual number of jobs in the Denver area has decreased for the first time since 1990 is not favorable. (Chart Below)

The following chart shows that per capita annual income both nominal and inflation adjusted has increased most years since 1990. Over the 20-year period, the average income per person increased 111% from $19,575 to $41,358. Based on an annual compound rate, this constitutes an annual rate of 4.02%, somewhat higher than the rate of inflation but certainly less than the rate of increase in both multi and single-family housing increases during the same time period. It is also notable that, since 1990, the per capita income increase after adjusting for inflation is only 24.3% or 1.15% per year compounded. Apparently, Colorado workers wages are increasing only slightly when inflation is taken into consideration. This situation could not continue without a dramatic drop in housing prices. Wage increases have happened but not at the same rate or at a higher rate than that in housing prices.

Migration Trends. In the past, migration trends have been an important factor in housing prices. New residents, especially those moving in as a result of a corporate transfer or new job offer, are usually very strong buyers. They are often receiving a hefty salary increase along with other relocation benefits. They have ample cash as a result of sale or corporate buyout of their previous residence. The actual statistics for 2009 are not yet readily available but in 2008, the in-migration is estimated at 65,304. Contrast that to 1990 when 12,500 more people moved out than moved in. In fact, the levels of 2002, 2003 and 2005 were at the lowest levels since 1990, probably due to the slowing tech industry.

In-migration trends will probably be even more important in the future due to the shrinking of the proportion of younger residents. This is a nationwide trend and the shortage of younger residents is becoming critical in many midwestern states.

Colorado has always offered an appealing lifestyle for younger residents, perhaps due, in part to the wide range of outdoor recreational activities. Colorado is amongst the highest when it comes 18-35 year old residents. The following chart shows in-migration trends since 1990. (Chart Below)

This data shows how strongly in-migration has been over the past 3 years. The pace is forecast to decrease slightly in 2010.

Forecasting past this point is likely to be an exercise in futility, dependent upon a number of factors and potential events (such as another terrorist attack or another market collapse) that can not be accurately predicted.

CONCLUSIONS

The Housing Market Has Weakened Is It Time For A Rebound? Decreased months supply for units on the market, decreased time required to market both single-family and condo/townhouse units, decreased building permits issued and a rise in population shows an increase in the supply and demand balance and are all encouraging signs. However, decreased units sold, decreased prices and an increase in unemployment are negative signs. In view of the weakened economy, it is somewhat surprising that the housing market has not weakened more than it has. Most likely, without the low interest rates and the tax incentives, the market would have continued to fall at a more rapid pace than it has. The $8,000 first time homebuyers credit and the $6,500 existing homebuyers tax credit apply towards a purchase that is under contract by 04/30/10 and closed by 06/30/2010. The limits on income for these credits are $125,000/yr for singles and $225,000/yr for couples. If these credits are extended I believe that it will help towards stopping the free fall and a stabilizing the marketplace. As for now, it is my opinion that the Denver area has not quite reached the bottom yet but we are getting very close. As this “crisis” nears the bottom it is creating great opportunity in the marketplace for investors.

Prices Should Stabilize. The price of the average home continues to decrease, although at a much slower rate than it did the previous year. The decrease is due to high foreclosure rate, job loss and stricter mortgage underwriting qualifications. The market is a strange place right now, in seemingly every subdivision; there are two sets of comparable sales for each property. One set is low; it includes foreclosed property, distressed properties and those anticipating an approved short sale. The other set are the non-distressed sales of homes in the same area that are not in foreclosure and as a general rule, in much better shape. The value of these individual units can be as much as 15-40% higher than that of the first set. The rate of future price decreases should be slower than in the past couple of years, unless foreclosure rates accelerate. With the improvements in the supply and demand, especially with the building permits at all time lows, the market should stabilize. In fact, many places in the metro area have seen marked improvement over the past 6-9 months.

The Recent Correction Is Healthy. The very strong market from the mid 1990’s through 2004 had to end. I know we all would have liked to see it continue forever but the recent slowing in the market is more beneficial than harmful. Over the past several months, the decline in the housing prices has slowed and in some particular areas price increases have been observed. The recent improvement in certain areas is a sign that the probability of the entire market stabilization, and/or a turnaround is in the not so distant future.

RECOMMENDATIONS

If You Are Buying a Home. While prices are lower and the tax incentives are still available it is a great time to buy. No longer are buyers forced to worry about competing offers at prices above the listed price except in a few instances where the broker of a foreclosed home dramatically under values the home to inspire multiple offers and higher bids. Sellers may also become more willing to negotiate if their agent properly counsels them. Due to the decrease in the amount of units sold, sellers are less likely to accept an offer contingent upon the sell of another property. If you have another home to sell, especially a high-priced townhouse, it is now more risky to buy your new property without selling the old one first. Unless you have substantial holding power, it would be best to sell your current home first. While the statistics presented here have value, there can be considerable variation within the various sub-markets. Whether you are buying or selling, ask me to determine the average months supply and average market time of the sub-area you are interested in. This will give you a measure of your negotiating edge and the potential for future appreciation in a given area.

If You Are Selling a Home. The most important advice here is one we’ve been giving for 20 years. Buyers will always pay for quality. Make your home as appealing as possible. In a strong market, paying attention to details may get you top price but in a weak market, it may be the difference between selling your asset and not selling. Many buyers barely have enough funds for a down payment. They would much prefer a higher price and higher monthly payments to a lower price, lower payments, and the requirement to spend another $20,000 to bring the home into acceptable condition after the sale. Be wary of pricing based on comparable sales alone. In weaker markets, such as this, previously sold properties may be higher than what a property is worth at the current time. Pay strong attention to the number of properties on the market in your area and price levels. Make sure your home is priced competitively with current inventory and in good shape. Very valuable information, some of which may not be readily available from other agents.

If You Are a Builder/Developer. Hope you can stick around for another couple of years as building permits are anticipated to stay at an extremely low level. This is good news for the rest of us but a hardship for those in the business.

If You Are an Investor. Again, our advice is virtually the same as it was 20 years ago. Emphasize current cash flow. Although vacancy rates are lower than they were a couple of years ago, the potential for a future rent increase is also low. If the property doesn’t make sense from a current cash flow standpoint, keep looking or make sure you have a reliable plan for increasing rents and improving the property. Investor demand is no longer high but you still need to be careful not to over-pay for a 100% occupied property that might be 70% before the year is over. Although it is important not to over-pay, realize that it is unlikely that you will be able to buy at the same rates of return you did in the late 80’s and early 90’s. While this is sometimes disturbing to experienced investors, it is not a disaster. The returns from real estate are still very competitive with other assets. With the sales market for single-family homes low and a strong market and low vacancies for single-family rentals, it is probably the most favorable time to invest in single-family homes during the past 5 years. Families that have gone through a foreclosure need somewhere to live and apartments are not offering enough space for their needs.

Westmont Companies, Helping you Create and Preserve Wealth.

At Westmont we consider our most important asset to be the confidence our clients have in the quality of our advice; therefore, we expend considerable effort in maintaining and improving our competence in all areas of real estate. Projects like this one are an example of that effort. We offer services in the following areas:

1. Personal Housing Needs. Whether you are a buyer, seller, or renter, we provide resources to help you accomplish your goals. If you are looking to sell your current home and purchase another, we will help you develop a strategy to accomplish your objectives and represent you throughout the process. If you are looking to purchase your first home, we will help you evaluate the risks and rewards and locate a property that’s right for you. If you are looking to rent an apartment, townhouse or single-family home, we manage a number of properties that may meet your needs.

2. Real Estate Finance. One of the biggest barriers to obtaining a mortgage that is compatible with your financial situation is sorting through all the media hype and choosing the proper combination of rate, term, and closing costs that work best for you. We have been in the mortgage industry since 1986.

3. Investment Real Estate. We help our clients buy, sell, and manage investment properties. In this role, we serve as a counselor to make sure that real estate decisions are compatible with other aspects of the client’s financial situation.

4. Property Management. If you own investment real estate, we’ll help you manage it for maximum return. This means making informed decisions on maintenance problems, potential improvements, and financing. We will investigate potential lessees and do our best to make sure they are capable of performing under the terms of the lease.

When it comes to locating suitable investments, qualified investor buyers will have more opportunity for the following reasons.

1. Fewer Buyers. Now that the $8,000 credit for first-time homebuyers is expiring, there will be less competition from buyers looking for the same kind of properties that make good investments.
2. Plenty of Inventory. Although there is talk of improvement in the housing market, foreclosure rates continue to increase.  Nationally, 1.47% of single-family homes are in foreclosure, an all time high.  Although 1.47% doesn’t sound like much, it represents a small percentage of a huge number, and a continuing supply of new properties in the marketplace
3. Motivated sellers. Lenders will always be motivated sellers since they absolutely have to sell to recover as much as their principal is possible.  Owners who are not yet in foreclosure but cannot make their current mortgage payments also represent very motivated sellers.  Mortgage delinquency rates are at 9.24%, an all time high.
4. More Stringent Underwriting Guidelines. While this may make it harder for some investors to buy, lenders will be eager to make loans to investors with stable finances, larger down payments, and good credit history.
5. More Renters. Marginal buyers are being forced from the marketplace.  That means more customers to rent your investment properties and provide cash flow to help make your mortgage payments and build your net worth.

While some investors are looking for a property they can steal, they end up spending too much time trying to find huge bargains and end up with nothing.  In markets like this it is sufficient to make a good buy and start building equity right away.   The coming fall and winter months are a good time to start.  As always, I am willing to counsel Cindy’s clients at no charge.  Check my blog for more information about investment strategies.

- Phil Storms

Real estate offers many benefits that are unavailable with other investment vehicles.  Here is a quick summary of some of those benefits:

1. Leverage.  You don’t have to pay cash for a real estate investment.  You can borrow on real estate at lower rates with a longer payback period than with virtually any other investment.
2. Tax Benefits.  There are many tax benefits associated with real estate ownership.  Within limits, you can deduct depreciation on most of your investment each year.  You get beneficial tax rates on any capital gains when you sell or you can postpone tax consequences altogether with a variety of techniques
3. You can find bargains.  If you want to buy 1000 shares of Exxon-Mobil stock you  have to pay the market price of about $71,000.  If you want to buy an investment house you can find bargains by locating motivated sellers and developing strong negotiating skills.  Experienced investors will often tell you that the money is made when you buy.
4. Greater control.  When you buy stocks you hope that the management makes the right decisions.  When you buy real estate you can influence the return. You decide how to set rent levels, make improvements, and when to sell.

These are some of the advantages of real estate investment.  There are also disadvantages.  If you want a more detailed discussion of both, call Cindy and she will arrange a complimentary consultation.

- Phil Storms

You can read more on personal finance by consulting my blog at www.cashflowgarden.blogspot.com

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Credit Definition

Credit scores are available through the three major national credit repositories, Experian, Equifax, and Trans Union. They are often referred to as FICO scores. Credit scores are the result of extensive research in which credit data on millions of consumers was obtained and compared with the incidence of serious delinquency over a period of time.

The results show a strong statistical correlation between the scores and the probability of default. Out of 1000 borrowers with scores below 600, 125 can be expected to default. This compares with only 8 of 1000 borrowers who have scores above 700. In general, credit scores are spread across the sample universe as follows:

• Lowest 20% Below 620
• Second 20% 620-690
• Third 20% 690-745
• Fourth 20% 745-780
• Top 20% Above 780

Please note that these scores relate to probabilities of default within a large sample and say little about whether or not a given individual or borrowing unit will actually default.
The good news is that these credit scores remove subjectivity from the credit analysis process. This is also bad news since evaluation is more rigid than in the past.

Factors That Make up Credit Scores

• Payment History (35%)
• Number and length of delinquencies.
• Public Records such as IRS liens, bankruptcies and judgments.
• Comparison between number of delinquent accounts and those accounts paid as agreed.
• How Much Credit (30%)
• Amount owed on all accounts (even if paid monthly).
• Percentage of credit used to credit available.
• Amount of money owed on installment debt compared to original amount borrowed.

• How Long Established (15%)
• Considers both the age on oldest accounts and average age of all accounts.
• How long has it been since certain accounts have been used.
• Is New Debt being acquired (10%)
• Number of New Accounts.
• Number of Inquiries.
• Time Elapsed Between Inquiries.
• What is the Mix of Credit (10%)
• Installment debt vs. revolving debt vs. mortgage debt.
• This is very difficult to quantify.

Improving Credit Scores

Since the formula is complex, it is difficult to quantify the effect of any strategy used to improve scores. Some attempts to raise your score may even backfire.

• Payment History (35%)
• Most difficult to improve. Unless errors are present there is no quick fix.
• Get current and stay current.
• Maintain prompt payment record. Over time effect of delinquencies diminishes.
• Paying a debt or collection does not remove it from your credit score.
• Paying off an old collection may actually lower your score.
• Amount of Credit (30%)
• Pay down debt. Moving it around won’t work or changing its form seldom works.
• Closing unused credit cards as a short-term strategy seldom works.
• Opening a bunch of new credit lines that you don’t need could backfire and lower your score.
• How Credit Has Been Established (15%)
• No quick fix.
• Don’t close a bunch of old accounts and establish a bunch of new one.
• Taking on New Debt (10%)
• Do your rate shopping within a short period of time. Contrary to popular belief, a number of inquiries over a short-period of time has no serious negative effect. The program is set to recognize the difference between rate shopping and applying for a large amount of new credit.
• Requesting your own credit report will not lower your score.
• A Healthy Credit Mix

• Apply for and open new accounts only as needed.
• Have credit cards and manage them responsibly and your score will be higher than borrowers with no cards.

Short-Term Credit Repair

We have emphasized the point that quick fixes are usually ineffective at increasing credit scores. The exception is when there are mistakes on the report. Example: A mortgage has been transferred and the borrower received inadequate notice. Payments were made to the old lender but lost in the shuffle. The credit score shows a mortgage with a 60-day delinquency.

The borrower can correct this by getting documentation from the lender stating that the 60 day delinquency is in error. After that, the best way to have this reflected in the credit score is to contact an agency such as Factual Data Information Services (1.800.766.5600). They will contact the repositories reporting incorrect information and obtain a corrected report and revised score within 3-5 business days. Their charge is $30 per borrower per bureau, thus correcting three bureaus on a joint account is $180.

If time is not an issue, you can do this yourself by sending documentation to the bureaus directly; however, if a mortgage loan is pending it may be worth the charge to pay the agency. While there is never a guarantee as to how a score will be changed by the correction, instances like the example above have resulted in a 70-90 point improvement. This may mean the difference between an A loan and a B paper loan or 1-2% improvement in the interest rate. Contacting the Bureaus If you have a client anticipating a major transaction in the future, it is best to get a reading on credit scores as soon as possible to allow time to improve the score.

The major credit bureaus are as follows:

Equifax 1.800.685.1111
Experian 1.888.397.3742
Transunion 1.800.888.4213

Comparing your Report to the Averages Number of Obligations

The average consumer has 11 obligations on record. Seven are likely to be credit cards and the remaining four installment debt, car loans, mortgages etc. Payment Performance; Almost 60% of consumers have never had a late payment of any kind reported and 80% have never had an obligation 60 days late or more. Less than 10% have ever had a loan or account closed due to default. Credit Utilization; About 48% of credit card accounts have less than $1,000. Only 10% carry $10,000 or more. Excluding mortgages, 54% of consumers have less than $5,000 of debt. Available Credit; The average consumer has access to $12,190 in credit and use less than 30% of their credit limit. Only 12% use 80% or more of their limit. Length of Credit History; The average consumer’s oldest account is 13 years old. Only 1 in 5 have a history of less than 2 years. Inquiries; The average consumer has had only 1 inquiry during the past year. Fewer than 7% have more than 4 inquiries.