Overall consumer distress rates and student loan delinquency rates in the New York Fed’s region remain below the national rates, while high mortgage delinquency rates in the region persist
NEW YORK – (RealEstateRama) — The Federal Reserve Bank of New York today issuedRegional Household Debt and Credit Snapshots, which examine borrowing and indebtedness trends throughout the Federal Reserve’s Second District, and are analogous to the national Quarterly Report on Household Debt and Credit. They include data about mortgages, home equity lines, student loans, credit cards, auto loans, and delinquencies for New York City and each of its boroughs, as well as metro areas throughout New York State, northern New Jersey, and western Connecticut. As part of today’s Snapshots series, the New York Fed issued the underlying data for this report.
The Snapshots are based on data from the New York Fed’s Consumer Credit Panel, a nationally representative sample drawn from anonymized Equifax credit data. The Snapshots series is updated biannually and today’s Snapshots reflect data through December 2015.
“From financing higher education to buying a home, borrowing and debt are integral to enabling and enriching many aspects of everyday life,” said Claire Kramer Mills, assistant vice president and community affairs officer. “Today’s Snapshots provide important insight into the financial health of communities in the New York Fed’s region. Our goal is to inform the public, policymakers, and other stakeholders in their efforts to promote economic growth.”
Of note, overall consumer distress rates in the New York Fed’s region remain well below the national rate. Consumer distress rates are the percent of consumers that were at least 90 days late on any loan type or had a third party collections balance within the last year. This rate is an indicator of difficulty managing debt and a proxy for financial stress. The consumer distress rates were 19.6 percent nationwide, 14.3 percent in New York, 15.5 percent in New Jersey, and 14.7 percent in Connecticut. All states improved compared to the distress rates reported in the June 2015Snapshots series.
Two components of consumer distress are the shares of seriously delinquent mortgage and student loan borrowers at least 90 days past due. In line with overall consumer distress rates trends, student loan delinquency rates in the New York Fed’s region were also notably below the national rate. The student loan serious delinquency rates were 16.2 percent nationwide, 12.5 percent in New York, 13.5 percent in New Jersey, and 12.9 percent in Connecticut. These mark slight declines in delinquencies from the previous Snapshots series across each of the national, New York, New Jersey, and Connecticut rates.
Overall mortgage delinquency rates are higher in New York and New Jersey, primarily due to the extended foreclosure timelines in those states. The national delinquency rate of mortgage borrowers was 2.3 percent – compared to 3.8 percent in New York, 4.6 percent in New Jersey, and 3.0 percent in Connecticut. Compared to the previous Snapshots series, national and state serious delinquency rates for mortgage borrowers in New York, New Jersey, and Connecticut declined between 0.1 and 0.6 percentage points.
New York State (All New York Sub-Regions except for New York City and Long Island)
- Consumer distress rates in upstate New York generally were closely aligned with the state rate of 14.3 percent. For example, consumer distress rates were 13.4 percent in the Albany-Schenectady-Troy area, 14.3 percent in Rochester, and 16.2 percent in Buffalo-Cheektowaga-Niagara Falls area.
- The average mortgage borrower balance in upstate New York was significantly lower than national and state averages, which were $221,000 across New York state and $187,900 nationally. For example, the average mortgage borrower balance was $102,600 in Syracuse and $88,100 in Binghamton.
- Meanwhile, in more southern areas of New York state, the average borrower balance was closer to, or above, the state average. For example, the average mortgage borrower balance was $152,600 in the Kingston Metro area and $309,100 in the Lower Hudson Valley.
New York City
- The overall consumer distress rate for New York City was 15.4 percent, or 1.1 percentage points above the New York state consumer distress rate.
- The Bronx had the highest serious delinquency rates of any other borough for mortgages, student loans, auto loans, and credit cards. The consumer distress rates for each of the other boroughs were below the national average by at least 3.2 percentage points.
- By a significant margin, Staten Island has the highest rates of mortgage borrowers in New York City. 27.7 percent of Staten Island residents have a mortgage, compared to 14.1 percent overall for New York City.
- The consumer distress rate for Long Island was 11.6 percent, significantly lower than both the national and New York state rates – which were 19.6 and 14.3 percent respectively.
- Long Island’s student loan borrower rate was very close to the state rate – 18.1 and 17.9 percent respectively – and 1.4 percentage points above the national student loan rate of 16.7 percent. At the same time, the rate of seriously delinquent student loan borrowers was 9.5 percent. This is the second lowest throughout the state of New York – 3 percentage points below the state rate and 6.7 percentage points below the national rate.
- Meanwhile, the rate of seriously delinquent mortgage loan borrowers for Long Island was 4.9 percent – which was more than double the national rate of 2.3 percent and also higher than the New York state rate of 3.8 percent. Extended foreclosure timelines in the region contribute to the high regional rate relative to the United States. Both the Long Island and New York State rates declined from the previous Snapshotsseries.
- Generally, borrowing and debt rates for Northeastern New Jersey, the Edison-New Brunswick Metro Division, and the Newark-Union Metro Division are closely aligned.
- Although the rates of mortgage borrowers nationally and in the regions of New Jersey that the New York Fed oversees are closely aligned, mortgage borrower balances in the New Jersey areas were significantly higher. For example, the average mortgage borrower balance nationally was $187,900 while the average balance for Northeastern New Jersey was $274,600 – comparable to other suburban areas like Long Island ($263,500) and the Lower Hudson Valley ($309,100).
- Newark-Union had a higher consumer distress rate than the rate for New Jersey overall – 16.3 percent compared to 15.5 percent respectively. This difference was driven by serious delinquencies in student loans, auto loans, and credit cards – which were each above the state average.
- Although the rates of mortgage borrowers nationally and in Fairfield County, Connecticut are closely aligned – 26.0 and 29.0 percent respectively – the mortgage borrower balance in Connecticut was significantly higher, reflecting relatively higher house prices. The average mortgage borrower balance nationally was $187,900 while the average balance for western Connecticut was $364,200, the second highest in the Second District.
betsy.bourassa (at) ny.frb (dot) org