Consumer credit scores

Consumer credit scores will peak in 2018. The average score rose 10 points during 2017, from 669 to 679, according to data from TransUnion. And we can expect continued growth in 2018. But it might not last much longer.

Low unemployment and continued economic growth are major tailwinds for credit scores, and 2018 is looking good in both regards. Furthermore, lots of negative records from the Great Recession are still falling off consumers’ credit reports. Charge-offs and bankruptcies stay on credit reports for seven years and 10 years, respectively. And the unemployment rate didn’t start dropping from financial-crisis highs until

U.S. auto sales will top 17 million for the fourth straight year. People keep waiting for the post-recession car-buying boom to end, but it just keeps chugging along. The average car is still 11.6 years old, according to the Bureau of Transportation Statistics.

Technological advances continue to drive interest. And record-setting natural disasters are even having an effect, forcing people to replace their totaled vehicles. Indeed, David Shulman, senior economist with the UCLA Anderson Forecast, foresees a “small increase” in auto sales during 2018 due to “pent-up demand from hurricane losses.”

As a result, we don’t see much of a slowdown, if any, in 2018.

Existing home sales

Existing home sales will again top 5 million, despite higher interest rates. Unlike credit cards, most mortgages aren’t directly affected by Fed rate hikes. Nearly 90 percent of mortgages have fixed rates and a 30-year term. And, despite the Fed increasing its target rate by 125 basis points, the average annual percentage rate on a 30-year fixedrate mortgage has actually fallen a bit since December 2015, according to Freddie Mac. But when people hear rates are rising, they think the window to borrow on the cheap is closing. And that can lead to more home sales.

Through October, existing home sales are 9 percent behind 2016’s pace, according to the most recent data from the Federal Reserve Bank of St. Louis. We ended 2016 with roughly 5.45 million homes sold, according to the National Association of Realtors, thanks to a strong November and December. And we expect similar results this year, continuing into 2018.

“Home sales can be expected to continue to rise in many markets that have yet to recover from the crash a decade back,” said Oscar Brookins, an associate professor of economics at Northeastern University. “Those markets that have already recovered (primarily the coastal markets) will probably continue growth and attenuate the existent gap between themselves.”

Bottom line: Barring unforeseen shocks, 2018 looks as though it will be a pretty good year for the economy and Americans’ personal finances.