Total household debt increased by $212 billion in the last quarter of 2023, according to recent findings from the New York Fed.
02/15/2024 2:35 P.M.
1 minute read
A recent study conducted by the New York Fed’s Center for Microeconomic Data looking at the fourth quarter of 2023 revealed key insights into the patterns of various loan types, household finances, credit card debt, and the subsequent challenges faced by borrowers.
Key findings of the study include:
- Overall, household debt increased by $212 billion in the last quarter, with notable growth in mortgage, home equity line of credit (HELOC), credit card, and auto loan balances. However, the growth was moderate compared to the rapid changes observed in previous years.
- The average origination amount on auto loan balances spiked in 2021 and 2022. Although both car prices and average origination amounts have begun to decline in the last year, there has been a steady rise in auto loan delinquency rates.
- Household debt delinquencies, which reached historic lows during the pandemic, are now on the rise again across all types of debt. Auto loans and credit cards, in particular, have seen a worsening trend in new delinquencies, surpassing pre-pandemic levels.
- Delinquency rates tend to decrease with age, but younger generations, especially Millennials, are experiencing higher delinquency rates compared to their predecessors. The disparities are less pronounced for auto loans, but all generations have seen sharp increases in delinquency transition rates over the past two years.
- The rise in delinquency is most pronounced for borrowers in the lowest-income areas, with research based on ZIP code average income.
Read the report here.Top of Form
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