Household debt and credit card delinquencies rise in third quarter 2017 |

Household debt and credit card delinquencies rise in third quarter 2017

Peter Terlato 15 November 2017 NEWS

Higher delinquency rates for credit cards and auto loans, while mortgage debt steadies.

The latest national data analyzing household debt levels in the United States reveals increased mortgage, student, automotive and credit card debt, as well as rising delinquencies, in the third quarter of 2017.

The Federal Reserve Bank of New York’s Center for Microeconomic Data’s Quarterly Report on Household Debt and Credit found total household debt in the US rose by $116 billion (0.9%) to $12.96 trillion.

The report, based on anonymized Equifax credit data, found mortgage debt rose 0.6% quarter-on-quarter, student debt was up 1.0% over the same period, and auto debt jumped 1.9% in the last three months.

There was a modest decline in home equity lines of credit (HELOC) balances, down 0.9% quarter-on-quarter.

Credit card debt increased $24 billion in the last quarter to total $808 billion. This figure is $61 billion higher than in Q3 2016. Debts for car loans rose $23 billion quarter-on-quarter in October, to $1.3 trillion as of Q3 2017.

Delinquency rates for credit cards (4.4% to 4.6%) and auto loans (2.3% to 2.4%) also rose in Q3 of 2017. However, the flow of serious mortgage debt delinquencies (1.2%) and home equity (0.9%) remained steady.

Late last month the CFPB reported that the national rate of seriously delinquent mortgages had fallen to its lowest level since the global financial crisis of 2008, with the fewest occurring in Colorado and Alaska.

However, a recent research report has discovered a record-low level of housing supply and increasing price growth across the United States is restricting the number of first-home buyers entering the marketplace.

Auto loan originations rose to $150.6 billion, the second highest level in over a decade.

“Examining the auto loan market more closely revealed notable differences between auto finance and auto bank lenders,” New York Fed senior vice president Wilbert van der Klaauw said.

“Delinquency rates among auto finance lenders are considerably higher and rising, especially for subprime borrowers, in part reflecting differences in underwriting standards.”

Outstanding student loan balances increased slightly quarter-on-quarter to $13 billion, while delinquencies declined slightly (9.7% to 9.6%). Students owe more than $1.4 trillion in repayments. Late last month the CFPB released a snapshot of nationwide student debt in the United States.

Consider consolidating your debt and read our guide for strategies to manage, repay and clear your debt.

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