FEDERAL RESERVE BANK OF NEW YORK
RESEARCH AND STATISTICS GROUP
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MICROECONOMIC STUDIES
QUARTERLY REPORT ON
HOUSEHOLDDEBT AND CREDIT
May 2014
Household Debt and Credit Developments in 2014 Q1
Aggregate consumer debt increased in the first quarter by $129 billion, marking the first time aggregate debt has grown for three consecutive quarters since 2008Q3. As of March 31, 2014, total consumer indebtedness was $11.65 trillion, up by 1.1% from its level in the fourth quarter of 2013. The four quarters ending on March 31, 2014 registered the largest increase ($419 billion or 3.7%) in total debt outstanding since late 2008. Nonetheless, overall consumer debt still remains 8.1% below its 2008Q3 peak of $12.68 trillion. Mortgages, the largest component of household debt, increased 1.4% during the first quarter of 2014. Mortgage balances shown on consumer credit reports stand at $8.17 trillion, up by $116 billion from their level in the fourth quarter. Furthermore, the year ending March 31, 2014 saw a net increase of $233 billion in mortgage balances, the largest year-over-year increase since 2008Q3. Balances on home equity lines of credit (HELOC) dropped by $3 billion (0.6%) in the first quarter and now stand at $526 billion. Non-housing debt balances increased by 1.4 %, with gains of $12 billion in auto loan balances and $31 billion in student loan balances only partially offset by declines of $24 billion in credit card balances and $3 billion in other non-housing balances. Delinquency rates improved for most loan types in 2014Q1. As of March 31, 6.6% of outstanding debt was in some stage of delinquency, compared with 7.1% in 2013Q4. About $770 billion of debt is delinquent, with $560 billion seriously delinquent (at least 90 days late or “severely derogatory”). Delinquency transition rates for current mortgage accounts have largely returned to pre-crisis levels, with 1.2% of current mortgage balances transitioning into delinquency. The rate of transition from early (30-60 days) into serious (90 days or more) delinquency dropped, to 18.3%, while the cure rate – the share of balances that transitioned from 30-60 days delinquent to current – rose to 35.1%. About 266,000 consumers had a bankruptcy notation added to their credit reports in 2014Q1, 14% fewer than in 2013Q1.
Housing Debt
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Originations, which we measure as appearances of new mortgage balances on consumer credit reports, dropped again, to $332 billion, the lowest level since 2011Q3.
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About 145,000 individuals had a new foreclosure notation added to their credit reports between January 1 and March 31.
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New foreclosures have been on a declining trend since the second quarter of 2009 and are now at the lowest levels seen since at least early 2003.
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Mortgage delinquency rates have seen consistent improvements; 3.7% of mortgage balances were 90+ days delinquent during 2014Q1, compared to 3.9% in the previous quarter.
Student Loans and Credit Cards
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Outstanding student loan balances reported on credit reports increased to $1.11 trillion (+$31 billion) as of March 31, 2014, representing a $125 billion increase over the past year.
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About 11.0% of aggregate student loan debt is 90+ days delinquent or in default.
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Balances on credit cards accounts decreased by $24 billion.
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The aggregate credit card limit is up by 5.0% from a year ago and stands at $2.9 trillion.
Auto Loans and Inquiries
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Auto loan originations decreased in the first quarter of 2014 to $85 billion.
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The percentage of auto loan debt that is 90+ days delinquent declined slightly to 3.3%.
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The number of credit inquiries within six months – an indicator of consumer credit demand – declined by about 8 million from the previous quarter, to 161 million.
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This report is based on the New York Fed Consumer Credit Panel, which is constructed from a nationally representative random sample drawn from Equifax credit report data. For details on the data set and the measures reported here, see the data dictionary available at the end of this report. Please contact Matt Mazewski with questions.
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