Total Household Debt Continues Consecutive Quarterly Increase

Credit card balances contribute to rise; while outstanding student loan debt slightly declines.

8/15/2019 10:00 AM

Total Household Debt Continues Consecutive Quarterly Increase

Consumer household debt balances have been on the rise for five years and quarterly increases continue on a consecutive basis, bringing the second quarter 2019 total to $192 billion, according to the Federal Reserve Bank of New York’s Household Debt and Credit Report.

Mortgage balances, which fuel most of the quarterly increase, rose by $162 million in the second quarter to $9.4 trillion.

Among the other top forms of consumer debt, credit card balances increased to $868 billion from $848 billion in the first quarter while student loan debt declined $8 billion to $1.48 trillion.

The second quarter debt is now $1.2 trillion higher than the peak of $12.68 trillion in 2008, according to the Fed.

The Fed also found improvement in new loan originations.

“New extensions of credit were strong for the second quarter. Auto loan originations, which include both newly opened loans and leases, remained high in the first quarter, at $156 billion,” according to the report. “Mortgage originations, which we measure as appearances of new mortgage balances on consumer credit reports and which include refinances, were at $474 billion, a marked increase from the volume seen in (the first quarter.) The aggregate credit card limit crept up for the 26th consecutive quarter, with a 1.1% increase from (the first quarter.)

“While nominal mortgage balances are now slightly above the previous peak seen in the third quarter of 2008, mortgage delinquencies and the average credit profile of mortgage borrowers have continued to improve,” Wilbert van der Klaauw, senior vice president at the New York Fed said in a news release. “The data suggest a more nuanced picture for other forms of household debt, with credit card delinquency rates continuing to rise.”

The share of credit card balances in 90 or more days of delinquency increased to 5.2% from 5% in the first quarter, continuing its growth since 2017.

Additional findings on credit delinquencies include:

  • 10.8% of aggregate student loan debt was 90 or more days delinquent or in default in the second quarter.
  • As of June 30, 4.4% of outstanding debt was in some stage of delinquency.
  • Of the $604 billion of delinquent debt, $405 billion falls into the seriously delinquent category, meaning it is at least 90 days late.

Read the complete second quarter Household Debt and Credit report here.

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