Federal Reserve: Total Household Debt Increases, Driven by Mortgage, Auto and Credit Card Debt

Credit Card Delinquency Flows Step Up Notably Over Past Year, While Delinquency Flows for Other Non-Housing Debt Worsen Modestly

NEW YORK – The Federal Reserve Bank of New York today issued its Quarterly Report on Household Debt and Credit which reported that total household debt increased by $115 billion (0.9%) to $12.84 trillion in the second quarter of 2017. There were modest increases in mortgage, auto and credit card debt (increasing by 0.7%, 2% and 2.6% respectively), no change to student loan debt and a modest decline in balances on home equity lines of credit (decreasing by 0.9%). The Report is based on data from the New York Fed’s Consumer Credit Panel, a nationally representative sample of individual- and household-level debt and credit records drawn from anonymized Equinox credit data.

Of note, credit card balance flows into both early and serious delinquency increased from a  year ago – a persistent upward movement not seen since 2009. Meanwhile, delinquency flows for other non-housing debt increased modestly, and in particular, the upward trend for auto loans in recent years continued. The New York Fed also issued an accompanying blog post which addresses the topic of transitions into delinquencies, examining recent developments in the consumer credit card market in more granularity.

“While relative low, credit card delinquency flows climbed notably over the past year,” said Andrew Haughwout, senior vice president at the New York Fed. “This is occurring within the context of loosening lending standards, as borrowers with lower credit scores recover their ability to access credit cards. The current state of credit card delinquency flows can be an early indicator of future trends and we will closely monitor the degree to which this uptick is predictive of further consumer distress.”

The Report includes a one-page summary of key takeaways and their supporting data points.

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