Delinquencies, Foreclosures and Bankruptcies Improve as Household Debt Stays Flat

New York, NY – May 12, 2015 – (RealEstateRama) — The Federal Reserve Bank of New York’s Household Debt and Credit Report revealed that aggregate household debt balances were largely flat in the first quarter of 2015. As of the end of March, total household indebtedness was $11.85 trillion, a $24 billion, or 0.2 percent, increase during the first quarter of this year. The report is based on data from the New York Fed’s Consumer Credit Panel, a nationally representative sample drawn from anonymized Equifax credit data.

The slowdown in growth can be attributed to a negligible uptick in mortgage balances, which are the largest component of household debt. Mortgage balances stood at $8.17 trillion in the first quarter. Additionally, balances on home equity lines of credit (HELOC), which were $510 billion at the end of fourth quarter, 2014, were unchanged in the first quarter of this year.

Non-housing debt balances increased by 0.7 percent from the end of last year, largely due to increases in student loans ($32 billion) and auto loans ($13 billion). These gains were partially offset by a $16 billion decline in credit card balances.

Measures on delinquencies, foreclosures and bankruptcies all improved in the first quarter. The percentage of outstanding debt in some stage of delinquency fell to 5.7 percent from 6.0 percent in the fourth quarter of 2014, with continuing improvements in mortgages. About 112,000 individuals had a new foreclosure notation added to their credit reports in the first quarter of this year, the lowest total since at least 1999. Four percent fewer consumers had a bankruptcy notation added to their credit reports, bringing the quarterly total to its lowest point since early 2006.

“Tight standards on mortgage lending are reflected in both sluggish growth in housing debt as well as substantial reductions in mortgage delinquency and defaults,“  said Andrew Haughwout, senior vice president and economist at the New York Fed.

Household Debt and Credit Developments as of Q1 2015:

Mortgage Debt (+) $1 billion (+) $6 billion $8.17 trillion
Student Loan Debt (+) $32 billion (+) $78 billion $1.19 trillion
Auto Loan Debt (+) $13 billion (+) $93 billion $968 billion
Credit Card Debt (-) $16 billion (+) $25 billion $684 billion
HELOC $0 billion (-) $16 billion $510 billion
Total Debt (+) $24 billion (+) $201 billion $11.85 trillion
*Change from Q4 2014 to Q1 2015
**Change from Q1 2014 to Q1 2015

90+ day delinquency rates:

CATEGORY Q1 2015 Q4 2014
Mortgages 3.0 % 3.1 %
Student Loans 11.1% 11.3%
Auto Loans 3.3% 3.5%
Credit Cards 8.4% 7.3%
HELOC 3.0% 3.2%
All 4.3% 4.3%

Household Debt and Credit Report »

1 Delinquency rates are computed as the proportion of the total debt balance that is at least 90 days past due.

2 As explained in a recent report, delinquency rates for student loans are likely to understate actual 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.

About the report: The Federal Reserve Bank of New York’s Household Debt and Credit Report provides unique data and insight into the credit conditions and activity of U.S. consumers. Based on data from the New York Fed’s Consumer Credit Panel, a nationally representative sample drawn from anonymized Equifax credit data, the report provides a quarterly snapshot of household trends in borrowing and indebtedness, including data about mortgages, student loans, credit cards, auto loans and delinquencies.  The report aims to help community groups, small businesses, state and local governments and the public to better understand, monitor and respond to trends in borrowing and indebtedness at the household level.  Sections of the report are presented as interactive graphs on the New York Fed’s Household Credit web pageand the full report is available for download.

Media Contact:

Kevin Sajdak
kevin.sajdak (at) ny.frb (dot) org

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