NEW YORK – The Federal Reserve Bank of New York today issued its Quarterly Report on Household Debt and Credit,which reported that total household debt increased by $114 billion (0.9%) to $12.84 trillion in the second quarter of 2017. There were modest increases in mortgage, auto and credit card debt (increasing by 0.7%, 2% and 2.6% respectively), no change to student loan debt and a modest decline in balances on home equity lines of credit (decreasing by 0.9%). The Report is based on data from the New York Fed's Consumer Credit Panel, a nationally representative sample of individual- and household-level debt and credit records drawn from anonymized Equifax credit data.
Of note, credit card balance flows into both early and serious delinquencies increased from a year ago – a persistent upward movement not seen since 2009. Meanwhile, delinquency flows for other non-housing debt increased modestly, and in particular, the upward trend for auto loans in recent years continued. The New York Fed also issued an accompanying blog post which addresses the topic of transitions into delinquencies, examining recent developments in the consumer credit card market in more granularity.
“While relatively low, credit card delinquency flows climbed notably over the past year,” said Andrew Haughwout, senior vice president at the New York Fed. “This is occurring within the context of loosening lending standards, as borrowers with lower credit scores recover their ability to access credit cards. The current state of credit card delinquency flows can be an early indicator of future trends and we will closely monitor the degree to which this uptick is predictive of further consumer distress.”
The Report includes a one-page summary of key takeaways and their supporting data points. Overarching trends from the Report’s summary include:
- Mortgage balances increased, originations declined and the median credit scores of borrowers for new mortgages declined slightly.
- Mortgage delinquencies improved while foreclosure notations decreased and remained low by historical standards.
- Auto loan balances continued their steady rise seen since 2011, with an increase in auto loan originations. Median credit scores of borrowers for these new loans declined slightly.
- Credit card balances increased and the credit card serious delinquency rate remained flat.
- Outstanding student loan balances were flat. The second quarter typically witnesses slow or no growth in student loan balances due to the academic cycle.
Bankruptcies & Delinquencies Overall
- Aggregate delinquency rates were roughly flat again.
- Bankruptcy notations increased and were roughly the same as the levels seen in Q2 2016.
- Although low by historical standards, early delinquency flows deteriorated somewhat—with student loans, auto loans and mortgages seeing moderate increases. Meanwhile, credit card debt transitioning into early and serious delinquencies increased notably from a year ago.
Household Debt and Credit Developments as of Q2 2017
|Category||Quarterly Change*||Annual Change**||Total as of Q2 2017|
|Mortgage Debt||(+) $64 billion||(+) $329 billion||$8.69 trillion|
|Home Equity Line of Credit||(-) $4 billion||(-) $26 billion||$452 billion|
|Student Loan Debt||No Change||(+) $85 billion||$1.34 trillion|
|Auto Loan Debt||(+) $23 billion||(+) $87 billion||$1.19 trillion|
|Credit Card Debt||(+) $20 billion||(+) $55 billion||$784 billion|
|Total Debt||(+) $114 billion||(+) $552 billion||$12.84 trillion|
*Change from Q1 2017 to Q2 2017
**Change from Q2 2016 to Q2 2017
90+ day delinquency rates (known as “seriously delinquent”)
|Q1 2017||Q2 2017|
|Home Equity Line of Credit||2.1%||1.9%|
|Student Loan Debt2||11.0%||11.2%|
|Auto Loan Debt||3.8%||3.9%|
|Credit Card Debt||7.5%||7.4%|
1Delinquency rates are computed as the proportion of the total outstanding debt balance that is at least 90 days past due.
2As explained in a previous report, delinquency rates for student loans are likely to understate effective delinquency rates because about half of these loans are currently in deferment, in grace periods or in forbearance and therefore temporarily not in the repayment cycle. This implies that among loans in the repayment cycle delinquency rates are roughly twice as high.
Household Debt and Credit Report »
About the Report
The Federal Reserve Bank of New York's Household Debt and Credit Report provides unique data and insight into the credit conditions and activity of U.S. consumers. Based on data from the New York Fed's Consumer Credit Panel, a nationally representative sample drawn from anonymized Equifax credit data, the report provides a quarterly snapshot of household trends in borrowing and indebtedness, including data about mortgages, student loans, credit cards, auto loans and delinquencies. The report aims to help community groups, small businesses, state and local governments and the public to better understand, monitor and respond to trends in borrowing and indebtedness at the household level. Sections of the report are presented as interactive graphs on the New York Fed's Household Credit web page and the full report is available for download.