Fed: Household debt rises to record trillion
U.S. household debt rose to a record $14 trillion in the third quarter, led by an increase in mortgage loans, the Federal Reserve Bank of New York said on Wednesday.
The current household debt level is $1.3 trillion higher than the previous peak that occurred in 2008’s third quarter. Overall household debt is now 25% above the post-crisis trough in 2013’s second quarter.
There was $528 billion of newly originated mortgages in the third quarter, according to the report. That brings the total mortgages showing on consumer credit reports to $9.44 trillion, the New York Fed said.
“The data suggest that households are taking advantage of a low-interest-rate environment to secure credit,” said Donghoon Lee, a research officer at the New York Fed.
Student debt, held by about 45 million borrowers, increased $20 billion during the quarter to a total of $1.5 trillion. Newly issued auto loans totaled $159 billion, the second-highest on record.
The percentage of households behind on their debt payments also rose in the three months from July through September, the New York Fed said. The aggregate delinquency rate rose to 4.8% from 4.4% in the second quarter, led by a pick-up in loans in the early stages of delinquency.
The share of mortgages in early delinquency that “cured” was 43%, “the most favorable observation since 2006,” the report said.
About 186,000 consumers had a bankruptcy added to their credit reports in the third quarter, an improvement from the year-ago quarter when 215,000 consumers had a new bankruptcy.
The number of credit inquiries within the past six months – an indicator of consumer credit demand – totaled 142 million, “a small increase from the previous quarter,” the report said.
The post Fed: Household debt rises to record $14 trillion appeared first on HousingWire.