New York Fed – Quarterly Report on Household Debt Rises

by Sabrina I. Pacifici on November 14, 2013

Household Debt and Credit Developments in 2013 Q3: “Aggregate consumer debt increased in the third quarter by $127 billion, the largest increase seen since the first quarter of 2008. As of September 30, 2013, total consumer indebtedness was $11.28 trillion, up by 1.1% from its level in the  second quarter of 2013. Overall consumer debt remains 11% below its peak of $12.68 trillion in 2008Q3.  Mortgages, the largest component of household debt, increased by 0.7% in the third quarter of 2013. Mortgage  balances shown on consumer credit reports stand at $7.90 trillion, up by $56 billion from their level in the second quarter. Balances on home equity lines of credit (HELOC) dropped by $5 billion (0.9%) and now stand at $535 billion. Household non-housing debt balances increased by 2.7%, with gains of $31 billion in auto loan balances, $33 billion in student loan balances, and $4 billion in credit card balances. Delinquency rates improved for most loan types in 2013Q3. As of September 30, 7.4% of outstanding debt was in some stage of delinquency, compared with 7.6% in 2013Q2. About $831 billion of debt is delinquent, with $600 billion  seriously delinquent (at least 90 days late or “severely derogatory”).  Delinquency transition rates for current mortgage accounts are near pre-crisis levels, with 1.6% of current mortgage  balances transitioning into delinquency. The rate of transition from early (30-60 days) into serious (90 days or more) delinquency increased slightly, to 22.7%, while the cure rate – the share of balances that transitioned from 30-60 days delinquent to current – also worsened somewhat, dropping to 25.7%.”

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