Economic Report: Household debt rises by $116 billion as credit-card delinquencies pile up

The numbers: Household debt rose by $116 billion, or 0.9%, to $12.96 trillion in the third quarter, the New York Fed said Tuesday. Credit-card debt rose by 3.1% while home equity lines of credit, or HELOC, balances fell by 0.9%. There were small gains in mortgage, student and auto debt.

Flows into credit-card and auto loans delinquencies rose, with 4.6% of credit card debt 90 days or more delinquent, up from 4.4% in the second quarter, and 2.4% of auto loan debt seriously delinquent, up from 2.3%. That’s still nowhere near the 9.6% of student loan debt that is delinquent, which itself is understated because about half of those loans are currently in deferment, grace periods or in forbearance.

What happened: U.S. households aren’t aggressively leveraging up, and the ones that are did so had better credit. The higher level of auto loan originations was mainly to prime borrowers, and the median credit score to individuals originating new mortgages ticked up to 760 from 754.

The big picture: Student and auto loans have grown rapidly, though not so much this quarter. Auto loans have grown for 26 straight quarters. But there are some worries as subprime auto loan performance continues to deteriorate — the delinquency rate for auto finance companies have grown by more than 2 percentage points since 2014, the New York Fed said.

Another concern is the upturn in serious delinquent credit-card debt, at a time when the job market is in strong shape.

Filed in: Top News Tags: 

You might like:

Encore: Yellen says inflation below 2% goal poses one of Fed’s ‘biggest challenges’ Encore: Yellen says inflation below 2% goal poses one of Fed’s ‘biggest challenges’
NewsWatch: If you like the FAANGs, you’ll love these three year-end melt-up candidates NewsWatch: If you like the FAANGs, you’ll love these three year-end melt-up candidates
Why nearly half of office Christmas parties won’t have booze this year Why nearly half of office Christmas parties won’t have booze this year
Personal Finance Daily: What’s at stake in ‘net neutrality’ debate and why nearly half of office Christmas parties won’t have booze this year Personal Finance Daily: What’s at stake in ‘net neutrality’ debate and why nearly half of office Christmas parties won’t have booze this year
The Wall Street Journal: 6 Citgo execs arrested in Venezuela, accused of corruption The Wall Street Journal: 6 Citgo execs arrested in Venezuela, accused of corruption
The New York Post: Uber paid ransom to keep data breach affecting 57 million users and drivers quiet The New York Post: Uber paid ransom to keep data breach affecting 57 million users and drivers quiet
Earnings Results: Salesforce earnings top Street estimates but shares back off record after hours Earnings Results: Salesforce earnings top Street estimates but shares back off record after hours
Market Extra: Goldman: ‘Rational exuberance’ to drive stock market in 2018 Market Extra: Goldman: ‘Rational exuberance’ to drive stock market in 2018

Leave a Reply

Submit Comment
© 2017 Stock Investors News. All rights reserved. XHTML / CSS Valid.