from the New York Fed
Auto debt continued its upward climb during the third quarter of 2015, according to the Federal Reserve Bank of New York’s Quarterly Report on Household Debt and Credit. Auto loan balances increased for the 18th straight quarter, this time by $39 billion, and stand at $1.05 trillion as of the end of September. The report is based on data from the New York Fed’s Consumer Credit Panel, a nationally representative sample of household credit data drawn from anonymized Equifax credit data.
Total household indebtedness increased $212 billion from the second quarter. The growth was driven primarily by a $144 billion increase in mortgage balances. Mortgage originations increased to $502 billion, continuing an upward trend that began in the second quarter of last year. Student loan and credit card balances increased by $13 and $11 billion, respectively, while balances on Home Equity Lines of Credit (HELOC) declined by $7 billion.
Delinquency trends were mixed in the third quarter. Foreclosures hit a new low in the 17-year history of the data. The share of mortgage balances 90 or more days delinquent dipped to 2.3 percent from 2.5 percent in the previous quarter. Moreover, 14 percent fewer consumers had a bankruptcy notation added to their credit reports in the third quarter of this year compared to the same quarter in 2014. However, 11.6 percent of aggregate student loan debt is either 90+ days delinquent or in default.
Auto loan originations were $151 billion in the third quarter. New charts introduced in this quarter’s report show that $33 billion of this sum was originated by borrowers with credit scores below 620, near the 10-year high. Said Donghoon Lee, Research Officer at the New York Fed:
The growth in auto loan balances and originations has been very robust. Credit conditions have remained attractive for auto purchasers with both prime and subprime credit.”
Household Debt and Credit Developments as of Q3 2015:
Category | Quarterly Change* | Annual Change** | Total as of Q3 2015 |
Mortgage Debt | (+) $144 billion | (+) $129 billion | $8.26 trillion |
HELOC | (-) $7 billion | (-) $20 billion | $492 billion |
Student Loan Debt | (+) $13 billion | (+) $77 billion | $1.20 trillion |
Auto Loan Debt | (+) $39 billion | (+) $111 billion | $1.05 trillion |
Credit Card Debt | (+) $11 billion | (+) $34 billion | $714 billion |
Total Debt | (+) $ 212 billion | (+) $355 billion | $12.07 trillion |
*Change from Q2 2015 to Q3 2015
**Change from Q3 2014 to Q3 2015
90+ day delinquency rates:
Category | Q3 2015 | Q2 2015 |
Mortgages | 2.3% | 2.5% |
HELOC | 2.4% | 3.2% |
Student Loans | 11.6% | 11.5% |
Auto Loans | 3.4% | 3.4% |
Credit Cards | 8.2% | 8.4% |
All | 3.8% | 4.0% |
Delinquency rates are computed as the proportion of the total outstanding debt balance that is at least 90 days past due.
As explained in a previous report, delinquency rates for student loans are likely to understate effective 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 page and the full report is available for download.
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