Impact of Variable Rate Mortgages Could Cut Across All Retail Sectors

BIGresearch Analysis Shows the Financial Mood of Variable Rate Mortgage Owners

COLUMBUS, OH -- (MARKET WIRE) – 10/10/07 – Over 7 trillion dollars in variable rate home loans will reset in the coming year and beyond that enormous number are millions of households who are waiting for the inevitable reset to happen. These households are already making adjustments to their purchase plans and that includes holiday spending, according to BIGresearch’s (http://www.bigresearch.com) monthly Consumer Intentions & Actions Survey (CIA) of over 8,000 consumers.

“Overall spending growth has been weak this year. Housing sales for August fell an unexpected 6.5%, credit is tightening and housing values are declining, along with the wealth of homeowners,” said Gary Drenik, President & CEO of BIGresearch. “For holders of variable rate mortgages, the scenario is intensified and appears to be impacting expenditures negatively and the biggest amount resets have yet to happen,” said Drenik.

An overview of variable rate mortgage holders versus the overall population shows that they have been more impacted by fluctuating gas prices and are putting off expenditures in the areas of durable goods, dining out, groceries and apparel. They also have significantly higher levels of credit card debt, a higher percentage have a home equity loan and are more budget conscious.

The shopping habits of those with variable rates also differ as they are more focused on needs over wants, buying clothing on sale, shopping closer to home and shopping less at enclosed malls. Regarding durable purchases like automobiles, fewer plan on buying and for those that do, more plan on buying a used car. In addition, their top financial plans are paying down debt and decreasing overall spending.

Regarding the upcoming holiday season, fewer consumers with variable rate mortgages plan on spending more than last year and more plan on spending less.

”Any unplanned shocks to the financial world of these individuals, such as increased gas prices or home heating, could put a damper on Retailers’ holiday sales,” said Drenik.

For a complete profile of the variable rate mortgage holder, including some of the top Retailers shopped at most often: http://info.bigresearch.com/

About BIGresearch
BIGresearch is a consumer intelligence firm providing analysis of behavior in areas of products and services, retail, financial services, automotive, and media. Each month, BIGresearch conducts the Consumer Intentions and Actions (CIA) Survey which monitors the pulse of more than 7,000 consumers. The CIA delivers fresh, demand-based information on where the retail consumer is shopping and their changing behavior. Unlike indicators based on past performance, this data brings intelligence on where the retail consumer is going, their intentions and actions. They also conduct the Simultaneous Media Survey (SIMM) which monitors over 15,000 consumers each month.

BIGresearch's methodology provides the most accurate consumer information in the industry with a margin of error of +/- 1 percent. http://www.bigresearch.com

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