Smart Borrower Blog

Consumer Household Debt Tops Record High


Aug 16th, 2018 @ 8:31 PM by Amber Nelson


Americans now have more debt than ever before, according to data from the Federal Reserve Bank of New York, but serious delinquency rates have remained near historic lows.

Total U.S. household debt now amounts to $13.29 trillion as the of the 2018 second quarter, up 0.6% from the first quarter. This marks the 16th straight quarterly increase and a 19.2% jump from the Great Recession low in 2013.

“Aggregate household debt grew for the 16th consecutive quarter in the second quarter of 2018,” said Wilbert van der Klaauw, senior vice president at the New York Fed. “While overall delinquency rates have remained stable at relatively low levels, transition rates into delinquency have fallen noticeably for student debt over the past year, reflecting an improved labor market and increased participation in various income-driven repayment plans.”

The jump in household debt was led by a $60 billion increase in mortgage loans, which now total $9 trillion. Student loan debt climbed $61 billion to $1.41 trillion, auto loan debt rose $48 billion to $1.24 trillion and credit card debt increased $45 billion to $829 billion. Among the tracked loan categories only home equity lines of credit decreased during the second quarter. They fell $4 billion to $432 billion.

Meanwhile, borrowers were able to keep up with their payments at the same rate as the first quarter. Only 2.3% of all loans were seriously delinquent (60 or more days late.) Seriously delinquent student loan  rates were the highest of any category with 8.6%, but that was down from 8.9% in the 2018 first quarter. Seriously delinquent credit card rates were the next highest in the second quarter at 4.8%, inching up from 4.7%. Just 2.3% of auto borrowers were seriously delinquent while only 1.2% of mortgage borrowers were behind by 60 days or more.

The New York Fed data comes from anonymized information from credit reporting bureau Equifax.

About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.

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