Measuring Household Debt

Household debt has risen by $219 billion as of Q3 2018, according to the latest Quarterly Report on Household Debt and Credit from the Federal Reserve Bank of New York. This is the 17th consecutive quarter with an increase, and the total is now $837 billion higher than the previous peak of $12.68 trillion in the third quarter of 2008.

Overall, the New York Fed report found that household debt is now 21.2 percent above post-financial-crisis trough in 2013. The report is based on data from the New York Fed’s Consumer Credit Panel.

The report found that mortgage originations have increased from $437 billion to $445 billion between Q2 2018 and Q3 2018. Additionally, mortgage delinquencies were roughly flat, with 1.1 percent of mortgage balances 90 or more days delinquent in the third quarter. Mortgage delinquency transition rates increased slightly with about 1.2 percent of current balances transitioning into delinquency. According to the New York Fed, 14.1 percent of mortgages in early delinquency (30 to 60 days late) transitioned to 90 days or more delinquent, up from the previous quarter’s 13.4 percent transition rate.

Additionally, around 64,000 individuals saw a new foreclosure notation added to their credit report. By historical standards, foreclosures are still very low.

“The new charts in our report help to better understand how the debt and repayment landscape has shifted in the years following the Great Recession,” said Donghoon Lee, Research Officer at the New York Fed. “Older borrowers now hold a larger share of total outstanding debt balances, while the shares held by younger borrowers have contracted and shifted toward auto loans and student loans.”

Non-housing household debt, including student loans, have increased as well. Student loan increased by $37 billion in Q3, up to $1.44 trillion total as of September 30. Meanwhile, auto loan debt increased to $1.27 trillion total and credit card balances increased to $844 billion. Credit inquiries have increased slightly, but the Fed notes that current credit inquiries are among the lowest historically.

Find the complete report from the New York Federal Reserve here.