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:

The Moneyist: My uncle with dementia needs long-term care—should I refinance his house? The Moneyist: My uncle with dementia needs long-term care—should I refinance his house?
People are paying $170 for medical treatments at ‘IV bars’—and they don’t work People are paying $170 for medical treatments at ‘IV bars’—and they don’t work
Americans’ fascination with ‘mortgage rates:’  a tour through financial market history Americans’ fascination with ‘mortgage rates:’ a tour through financial market history
Key Words: Op-ed from Reagan daughter Patti Davis reveals why she — and many victims — can’t remember details of their sexual assault Key Words: Op-ed from Reagan daughter Patti Davis reveals why she — and many victims — can’t remember details of their sexual assault
NewsWatch: Comcast tops Fox with final $38.8 billion bid to acquire Sky NewsWatch: Comcast tops Fox with final $38.8 billion bid to acquire Sky
Deep Dive: Here’s how all 30 Dow Jones Industrial Average stocks performed as the benchmark set another record Deep Dive: Here’s how all 30 Dow Jones Industrial Average stocks performed as the benchmark set another record
Economic Report: Mortgage rates jump to four-month high as housing market hits a bump Economic Report: Mortgage rates jump to four-month high as housing market hits a bump
This chart shows the haves and have-nots of the housing market, and it’s getting worse This chart shows the haves and have-nots of the housing market, and it’s getting worse

Leave a Reply

Submit Comment
© 2018 Stock Investors News. All rights reserved. XHTML / CSS Valid.