QUARTERLY REPORT ON HOUSEHOLD DEBT AND CREDIT

QUARTERLY REPORT ON

HOUSEHOLD DEBT AND CREDIT

May 2016

FEDERAL RESERVE BANK OF NEW YORK

RESEARCH AND STATISTICS GROUP MICROECONOMIC STUDIES

Household Debt and Credit Developments in 2016Q11

Aggregate household debt balances increased in the first quarter of 2016. As of March 31, 2016, total household indebtedness was $12.25 trillion, a $136 billion (1.1%) increase from the fourth quarter of 2015. Overall household debt remains 3.3% below its 2008Q3 peak of $12.68 trillion.

Mortgage balances, the largest component of household debt, increased in the first quarter. Mortgage balances shown on consumer credit reports stood at $8.37 trillion, a $120 billion increase from the fourth quarter of 2015. Balances on home equity lines of credit (HELOC) dropped by $2 billion, to $485 billion. Non-housing debt balances rose somewhat in the first quarter; increases of $7 billion and $29 billion in auto and student loans, respectively, were offset by a $21 billion decline in credit card balances.

New originations were muted. Mortgage originations, which we measure as appearances of new mortgage balances on consumer credit reports and which include refinanced mortgages, were at $389 billion, a decline from the first quarter. Auto loan originations were $124 billion, a small decline from the historically high levels seen in 2015. The aggregate credit card limit increased for the 13th consecutive quarter, and was up by 2% from the previous quarter. HELOC limits increased by 0.1% - the first uptick in HELOC limits seen since 2014Q4.

The distribution of the credit scores of new mortgage borrowers increased, with the median credit score for newly originated mortgages increasing slightly, and 58% of all new mortgage dollars going to borrowers with credit scores over 760. While auto loan originations fell below their 2015:Q4 levels, by historical standards they remained strong across the credit score distribution.

Overall delinquency rates improved in 2016Q1. As of March 31, 5.0% of outstanding debt was in some stage of delinquency. Of the $613 billion of debt that is delinquent, $436 billion is seriously delinquent (at least 90 days late or "severely derogatory").

About 207,000 consumers had a bankruptcy notation added to their credit reports in 2016Q1, 19% fewer than in the same quarter last year.

Housing Debt Mortgage originations declined, to $389 billion. About 97,000 individuals had a new foreclosure notation added to their credit

reports between January 1 and March 31, just above the lowest level seen in the 17-year history of the data. Mortgage delinquencies continued the improving trend seen in the past 5 years. 2.1% of mortgage balances were 90 days

delinquent at the end of 2016Q1, compared to 2.2% in the previous quarter. Delinquency transition rates for current mortgage accounts continued to improve across the board, with 0.9% of current balances

transitioning to delinquency. Of mortgages in early delinquency, 17.5% transitioned to 90+ days delinquent, while 38.1% became current.

Student Loans, Credit Cards, and Auto Loans Outstanding student loan balances increased by $29 billion, to $1.26 trillion as of March 31, 2016. 11.0% of aggregate student loan debt was 90+ days delinquent or in default in 2016Q1,2 an improvement from the 11.5% rate

seen in 2015Q4. Auto loan balances reached $1.07 trillion, a $7 billion increase. 3.5% of auto loan balances are 90 or more days delinquent, up

from the previous quarter. Credit card balances declined by $21 billion, to $712 billion, while credit card delinquency rates were stable

Credit Inquiries The number of credit inquiries within six months ? an indicator of consumer credit demand ? declined by 8 million from the

previous quarter, to 167 million.

1 This report is based on the New York Fed Consumer Credit Panel, which is constructed from a nationally representative random sample drawn from Equifax credit report data. For details on the data set and the measures reported here, see the data dictionary available at the end of this report. Please contact Joelle Scally with questions at joelle.scally@ny.. 2 As explained in a recent report, delinquency rates for student loans are likely to understate effective delinquency rates because about half of these loans are currently in deferment, in grace periods or in forbearance and therefore temporarily not in the repayment cycle. This implies that among loans in the repayment cycle delinquency rates are roughly twice as high.

1

Page Left Blank Intentionally

NATIONAL CHARTS

2

Total Debt Balance and its Composition

Trillions of Dollars

Trillions of Dollars

15

15

Mortgage HE Revolving Auto Loan Credit Card Student Loan Other

2016Q1 Total: $12.25 Trillion

2015Q4 Total: $12.12 Trillion

12

(3%) 12

(10%)

(6%)

(9%)

9

9

(4%)

6

(68%) 6

3

3

0

0

Source: FRBNY Consumer Credit Panel/Equifax

3

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download