These sunny-side loans don’t perform as well as the overcast onessunny loans

(Source: Market Watch) –
If it’s true that it’s always sunny in Philadelphia, that might be a good place to try to get a loan.

A recent paper published by the Cleveland Fed found a strong link between sentiment influenced by weather and mortgage approvals.

As might be expected, positive sentiment, which emerges in sunnier weather, leads to higher credit approvals, while rainy-day moods result in tighter credit conditions.
Using the database of the National Oceanic and Atmospheric Administration, the researchers analyzed data in more than 2,000 U.S. counties from 1998 to 2010.

Sunny sentiment boosts approvals for credit applications by 0.80% while approvals drop by 1.41% on overcast days.

Those sound like small amounts, but as the researchers point out, such shifts can have “significant” effects.

“A rough estimate of the extra credit approved on one perfectly sunny day relative to one fully overcast day is about $150 million nationwide or $91,000 per county-day,” they wrote.

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Erik Sandstrom
LoanSafe's Mortgage Expert
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