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Mortgage balances—shown on consumer credit reports on June 30 stood at $9.78 trillion, a $63 billion increase from 2020:Q1. Balances on home equity lines of credit (HELOC) saw an $11 billion decline, its 14th consecutive decrease since 2016:Q4, bringing the outstanding balance to $375 billion. Credit card balances declined sharply in the second quarter, by $76 billion, the steepest decline in card balances seen in the history of the data and reflecting the sharp declines in consumer spending due to the COVID-19 pandemic and related social distancing orders. Auto loan balances were roughly flat in the second quarter. Student loan balances increased slightly by $2 billion reflecting a wide application of forbearances on federal student loans and interest waiver. In total, non-housing balances (including credit card, auto loan, student loan, and other debts) saw the largest decline in the history of this report, with an $86 billion decline.
Credit card balances declined sharply in the second quarter, by $76 billion, the steepest decline in card balances seen in the history of the data and reflecting the sharp declines in consumer spending due to the COVID-19 pandemic and related social distancing orders. Auto loan balances were roughly flat in the second quarter. Student loan balances increased slightly by $2 billion reflecting a wide application of forbearances on federal student loans and interest waiver. In total, non-housing balances (including credit card, auto loan, student loan, and other debts) saw the largest decline in the history of this report, with an $86 billion decline.
Aggregate delinquency rates dropped markedly in the second quarter, reflecting an uptake in forbearances (provided by both the CARES Act and voluntarily offered by lenders), which protect borrowers’ credit files from the reporting of skipped or deferred payments. Note the difference that accounts in forbearance might be categorized as delinquent on the lender’s book, but typically as current on the credit reports. As of June 30, 3.6 percent of outstanding debt was in some stage of delinquency, a 1.0 percentage point decrease from the fourth quarter of 2019. Of the $512 billion of debt that is delinquent, $372 billion is seriously delinquent (at least 90 days late or “severely derogatory,” which includes some debts that have been removed from lenders books but upon which they continue to attempt collection).
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