Press Release

Total Household Debt Rises for 15th Straight Quarter, Led by Mortgages, Student Loans

Delinquency Rates for Credit Cards Remain Elevated, While Student Loans Show Improvement
May 17, 2018

NEW YORK—The Federal Reserve Bank of New York’s Center for Microeconomic Data today issued its Quarterly Report on Household Debt and Credit, which shows that total household debt increased by $63 billion (0.5%) to $13.21 trillion in the first quarter of 2018. It was the 15th consecutive quarter with an increase, and the total is now $536 billion higher than the previous peak of $12.68 trillion, from the third quarter of 2008. Further, overall household debt is now 18.5% above the post-financial-crisis trough reached during the second quarter of 2013. 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.

Mortgage balances—the largest component of household debt—rose by $57 billion during the first quarter, to $8.94 trillion. Balances on home equity lines of credit (HELOC) continued their downward trend, declining by $8 billion, to $436 billion. The median credit score of newly originating mortgage borrowers increased from 755 to 761.

"While housing wealth is at an all-time high, it has shifted into the hands of older and more creditworthy borrowers, in part because of tight mortgage lending standards," said Andrew Haughwout, senior vice president at the New York Fed. "An increased amount of available home equity should make the household balance sheet more resilient in the event of a financial shock, though that may not be an option for lower-credit-score borrowers."

The Report includes a one-page summary of key takeaways and their supporting data points. Overarching trends from the Report’s summary include:

Housing Debt

  • While mortgage balances increased modestly, originations declined slightly, to $428 billion, versus $452 billion in the fourth quarter.
  • Mortgage delinquencies continued to improve, with 1.2% of mortgage balances 90 or more days delinquent in the first quarter. The share of mortgages in early delinquency that "cured" by transitioning to current improved to 40.5%, from 35.9% in the fourth quarter.

Non-Housing Debt

  • Outstanding student loan debt grew by 2.1%, to $1.41 trillion, from $1.38 trillion at year-end 2017.
  • Auto loan balances continued their six-year upward trend, increasing by $8 billion in the quarter, to $1.23 trillion.
  • Credit card balances declined by $19 billion, or 2.3%, which is consistent with the seasonal pattern.

Delinquencies, Bankruptcies, and Credit Inquiries

  • Credit card delinquency rates rose by about half a percentage point, with 8% of balances 90 or more days delinquent as of March 31.
  • For student loans, 10.7% of aggregate debt was 90 or more days delinquent or in default at the end of the first quarter, a decline of three-tenths of a percentage point from the previous quarter.
  • Auto loan delinquency rates edged higher, with 4.3% of auto loan balances 90 or more days delinquent as of March 31, versus 4.1% at year-end.
  • About 192,000 consumers had a bankruptcy notation added to their credit reports in the first quarter, the lowest observed in the 19 year history of the data.
  • The number of credit inquiries within the past six months—an indicator of consumer credit demand—declined in the first quarter to 146 million, the lowest level seen in the history of the data.

    Household Debt and Credit Developments as of Q1 2018

    Category Quarterly Change* Annual Change** Total as of Q1 2018
    Mortgage Debt (+) $57 billion (+) $312 billion $8.94 trillion
    Home Equity Line of Credit (-) $8 billion (-) $20 billion $436 billion
    Student Loan Debt (+) $29 billion (+) $63 billion $1.41 trillion
    Auto Loan Debt (+) $8 billion (+) $62 billion $1.23 trillion
    Credit Card Debt (-) $19 billion (+) $51 billion $815 billion
    Total Debt (+) $63 billion (+) $486 billion $13.21 trillion

    *Change from Q4 2017 to Q1 2018

    **Change from Q1 2017 to Q1 2018

    Flow into Serious Delinquency (90 days or more delinquent)


    Category1
    Q4 2017 Q1 2018
    Mortgage Debt 1.1% 1.1%
    Home Equity Line of Credit 0.9% 1.0%
    Student Loan Debt 2 9.3% 8.9%
    Auto Loan Debt 2.3% 2.3%
    Credit Card Debt 4.6% 4.7%
    All 2.3% 2.3%

    1 Rates represent annualized shares of balances transitioning into delinquency. Flow into serious delinquency is computed as the balances that have newly become at least 90 days late in the reference quarter divided by the balances that were current or less than 90 days past due in the previous quarter.

    2 As 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.

Contact
Brian Manning
(212) 720-6143
brian.manning@ny.frb.org