Vehicle Demand High Despite Lower Supply

NY Fed reported consumers are undeterred by higher prices and the larger monthly payments brought on by the scarcity of new and used vehicles. With a proposed "unaffordable" point not yet reached, how has the chip shortage affected the market so far?

• Nationwide Auto Originations are worth a record $180.5 Billion (up 11.7% from the previous year)
• Borrows between 18-29 show a small increase in non-serious delinquency: up from 2.71% in 2020 to 2.98% Q4 2021, with serious delinquency down.
• Average monthly auto payment is up 8% for new and used combined.

Fed researchers say they are watching closely to see how things go, citing the prices not being able to rise forever, but that the reliance on cars is not an easy thing to substitute out of.

Telling it like it is - What are we going to do with the chips? Grab some queso and watch the Super Bowl! Wait…