FEDERAL RESERVE BANK OF NEW YORK
RESEARCH AND STATISTICS GROUP
●
MICROECONOMIC STUDIES
QUARTERLY REPORT ON
HOUSEHOLDDEBT AND CREDIT
May 2013
Household Debt and Credit Developments in 2013 Q1
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Aggregate consumer debt declined in the first quarter, by $110 billion, resuming the longer-term downward trend.As of March 31, 2013, total consumer indebtedness was $11.23 trillion, 1.0% lower than its level in the fourth quarter of 2012. Overall consumer debt remains considerably below its peak of $12.68 trillion in 2008Q3.Mortgages, the largest component of household debt, fell in the first quarter of 2013. Mortgage balances shown onconsumer credit reports stand at $7.93 trillion, down $101 billion from the level in the fourth quarter of 2012. Balances onhome equity lines of credit (HELOC) dropped by $11 billion (2.0%) and now stand at $552 billion. Household non-housingdebt balances were roughly flat, with increases in auto and student loans, by $11 billion and $20 billion respectively, offset by decreases in credit card balances ($19 billion) and other consumer loan balances ($10 billion).Delinquency rates continue to show improvements across the board in 2013Q1. As of March 31, 8.1% of outstanding debt was in some stage of delinquency, compared with 8.6% in 2012Q4. About $909 billion of debt isdelinquent, with $678 billion seriously delinquent (at least 90 days late or “severely derogatory”).Delinquency transition rates for current mortgage accounts improved during the first quarter of 2013, with 1.6% of current mortgage balances transitioning into delinquency in the first quarter. The rate of transition from early (30-60 days)into serious (90 days or more) delinquency fell noticeably to 22.8%, while the cure rate – the share of balances thattransitioned from 30-60 days delinquent to current – improved in the quarter increasing to 34.7%.About 309,000 consumers had a bankruptcy notation added to their credit reports in 2013Q1, a 16.8% drop from thesame quarter last year, and the ninth consecutive drop in bankruptcies on a year-over-year basis.
Housing Debt
Originations, which we measure as appearances of new mortgage balances on consumer credit reports, rose to $577 billion. The level of originations has been increasing since bottoming out in the third quarter of 2011.
About 184,000 individuals had a new foreclosure notation added to their credit reports between January 31 and March31. Foreclosures are down 12.5% from the previous quarter, the fourth consecutive quarterly decline, and 68% belowthe peak of 566,000 new forclosures in the second quarter of 2009.
Mortgage delinquency rates continued to improve in 2013Q1, with 5.4% of mortgage balances 90+ days delinquent,compared to 5.6% in the previous quarter.
Delinquency rates in Home Equity Lines of Credit dropped again, from 3.5% in 2012Q4 to 3.2% in 2013Q1.
Student Loans
Outstanding student loan balances increased by $20 billion during the first quarter, to a total of $986 billion as of March31, 2013.
The 90+ day delinquency rate on student loans dropped and stands at 11.2%, down from 11.7% in 2012Q4
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Credit Cards and Consumer Credit Demand
Aggregate credit card limits were roughly flat during the quarter
There are 383 million open credit card accounts, unchanged from 2012Q4.
Balances on credit cards accounts fell by approximately $19 billion.
The number of credit inquiries within six months – an indicator of consumer credit demand –declined again. There were158 million inquiries in 2013Q1, down from the 164 million inquiries seen in the previous quarter.
Auto Loans
Auto loan originations dropped in the first quarter of 2013. During the first quarter, there were $78 billion in newlyoriginated auto loans, down 12.3% from the previous quarter.
The percentage of auto loan debt that is 90 or more days delinquent fell slightly to 3.9%.
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This report is based on data from the FRBNY Consumer Credit Panel. For details on the data set and the measures reported here, see the data dictionaryavailable at the end of this report. Please contact Joelle Scally with questions.
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As explained in a recent Liberty Street Economics blog post, these delinquency rates for student loans are likely to understate actual delinquency rates because almost half of these loans are currently in grace periods, in deferment, or in forebearance and therefore temporarily not in the repayment cycle. Thisimplies that among loans in the repayment cycle delinquency rates are roughly twice as high.
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