Fed Report: Auto Loan Originations Reach New High; Total Household Debt Continues Quarterly Increase

The Federal Reserve Bank of New York findings also show growth in credit card balances and delinquency rates.

2/13/2019 12:00 PM

Fed Report: Auto Loan Originations Reach New High; Total Household Debt Continues Quarterly Increase

Household debt in the U.S. increased by a modest amount in the fourth quarter 2018, primarily due to a tapering in growth of mortgage balances, according to the New York Federal Reserve’s latest Quarterly Report on Household Debt and Credit.

The total household debt increased by $32 billion (0.2 percent) to $13.54 trillion in the fourth quarter last year.

While mortgage balance growth slowed, auto loan originations increased along with total auto loan balances, according to a news release on the report.

Overall, the New York Fed reports last year’s increase marks the 18th consecutive quarter of growing household debt and consumers’ total balances are $869 million more than the previous peak of $12.68 trillion in the third quarter of 2008.

Key facts from the report include:

  • Mortgage loan originations declined to $401 billion from $445 billion, the lowest amount for home purchases in nearly four years;
  • Outstanding student loan debt grew to $1.46 trillion from $1.44 trillion
  • Credit card balances increased by $26 billion to $870 billion, which is in line with seasonal patterns but is the first time balances “re-touched the 2008 nominal peak”;
  • 2018 had the most auto loan originations in dollars ($584 billion) and marks the highest year in the 19-year history of the data for auto loan originations (in nominal terms);
  • The growth in auto loan originations includes $144 billion in newly originated loans, continuing nine years of growth.

“Auto loan originations for 2018 reached an all-time high in our dataset and the growth has been driven by creditworthy individuals. Despite auto debt’s increasing quality, its performance has been slowly worsening,” Joelle Scally, administrator of the Center for Microeconomic Data at the New York Fed, said in the news release. “Growing delinquencies among subprime borrowers are responsible for this deteriorating performance, and younger borrowers are struggling most acutely to afford their auto loans.”

Read more on auto loan debt trends in a blog post from the New York Fed.

The New York Fed also finds that credit card debt serious delinquency rates (90 or more days delinquent) increased to 4.99 percent from 4.80 percent. Student loan delinquency rates increased only slightly from 9.07 percent to 9.08 percent.

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