District general retailers, auto dealers, and hospitality contacts reported mixed business activity and a slightly negative outlook. A Little Rock auto dealer reported that business activity was down slightly as bank financing continues to tighten.
Auto purchases remained subdued in most District states. Credit standards continued to tighten for all loan types, loan spreads narrowed, and deposit rates moved higher. Delinquency rates edged up. Contacts cautioned that the average loan-to-value ratio on outstanding used car loans has risen to about 120 percent, presenting potential risks to the auto finance market.
Auto sales remained unchanged or exhibited moderate growth across most Districts. Auto inventories rose slightly but remained below pre-pandemic levels, with contacts noting that railcar shortages were slowing deliveries of vehicles to dealers.
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