Fed Report: Total Household Debt Continues Consecutive Quarterly Increase

The Federal Reserve Bank of New York findings also show a rise in the number of younger borrowers with credit cards in recent years.

5/15/2019 10:00 AM

Fed Report: Total Household Debt Continues Consecutive Quarterly Increase

Consumers’ total household debt in the first quarter of 2019, including mortgages, auto loans and student loans, topped the previous peak reached during the Great Recession, according to the Federal Reserve Bank of New York’s latest report on Household Debt and Credit.

First quarter debt this year is $13.67 trillion, a $124 billion increase since the fourth quarter 2018, according to a news release from the New York Fed.

The research also shows that approximately 9 % of consumers had a debt referred to a third-party collection agency in the first quarter and the average debt amount per consumer is about $1,400, compared to about $900 in 2003.

“Aggregate household debt balances ticked up in the first quarter of 2019 for the 19th consecutive quarter and are now $993 billion (7.8%) higher than the previous (third quarter 2018) peak of $12.68 trillion,” the New York Fed reports. “As of March 31, 2019, total household indebtedness was $13.67 trillion, a $124 billion (0.9%) increase from the fourth quarter of 2018.”

Overall household debt is now 22.5% above the low point reached in the second quarter of 2013.

Mortgage balances tracked by the Fed increased by $120 billion to $9.2 trillion, and outstanding student loan debt increased by $29 billion to $1.49 billion.

New York Fed researchers also report credit card debt balances declined slightly to $848 billion from $870 billion, but delinquency rates and the number of younger borrowers with credit cards have increased.

“Card participation data reveal interesting trends when disaggregated by age group,” according to the researchers. “The prevalence of credit card accounts declined steeply for young borrowers between 2008 and 2012, partly because the Card Act limited issuance to the youngest borrowers. Older borrowers are far more likely to have a credit card, and their participation rates experienced a much smaller contraction. The youngest borrowers saw a 14-percentage point decline in their participation rate, and by 2012 only 41% of those in their twenties had a credit card. This trend has reversed, however, and now more than half (52%) of those in their twenties have credit cards.”

The increase in credit card delinquency rates is likely influenced by the increased numbers of younger borrowers (ages 20-29) in the credit card market.

“The rate at which credit card balances become delinquent has been rising, and that has coincided with an increase in younger borrowers entering the credit card market,” said Andrew Haughwout, senior vice president at the New York Fed, in a blog post. “However, these delinquency rates are increasing from historically low levels and remain below pre-financial-crisis levels.”

Read more findings in the Quarterly Report on Household Debt and Credit.

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