NEW YORK—Auto loan originations are at the highest level in eight years and auto loan balances, which include leases, have increased for the 13th consecutive quarter, according to the Federal Reserve Bank of New York’s Q2 2014 Household Debt and Credit report. Overall outstanding household debt was essentially flat, as the level declined $18 billion from the previous quarter. The report is based on data from the New York Fed’s Consumer Credit Panel, a nationally representative sample drawn from anonymized Equifax credit data.
Mortgage debt declined $69 billion and home equity lines of credit (HELOC) were down $5 billion. Non-housing related debt increased 1.9 percent boosted by gains in auto loans ($30 billion), credit card balances ($10 billion) and student loans ($7 billion). Total household indebtedness at $11.63 trillion, is down 0.2 percent from the previous quarter. Overall household debt remains 8.2 percent below the peak of $12.68 trillion reached in Q3 2008.
In conjunction with the report, a new blog post, describing auto loan originations by credit score and funding source is available on our Liberty Street Economics Blog.
“A slight decline in real estate-related balances, consistent with broader housing market developments, contributed to a flat quarter for total outstanding household debt,” said Donghoon Lee, senior economist at the New York Fed. “Meanwhile, we observe continued strength in the auto loan market with the largest volume of originations since 2006.”
Household Debt and Credit Developments as of Q2 2014:
| Category | Quarterly Change* | Annual Change** | Total as of Q2 2014 |
|---|---|---|---|
| Mortgage Debt | (-) $69 billion | (+) $255 billion | $8.09 trillion |
| Student Loan Debt | (+) $7 billion | (+) $124 billion | $1.12 trillion |
| Auto Loan Debt | (+) $30 billion | (+) $91 billion | $905 billion |
| Credit Card Debt | (+) $10 billion | (+) $1 billion | $669 billion |
| HELOC | (-) $5 billion | (-) $19 billion | $521 billion |
| Total Debt | (-) $18 billion | (+) $479 billion | $11.63 trillion |
**Change from Q2 2013 to Q2 2014
90+ Day Delinquency Rates1:
| Category | Q2 2014 | Q1 2014 |
|---|---|---|
| Mortgages | 3.4% | 3.7% |
| Student Loans2 | 10.9% | 11.0% |
| Auto Loans | 3.3% | 3.3% |
| Credit Cards | 7.8% | 8.5% |
| HELOC | 3.3% | 3.4% |
| All | 4.5% | 4.8% |
, delinquency rates for student loans are likely to understate actual 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.Other highlights from the report:
- Mortgage originations, which we measure as appearances of new mortgage balances and also includes refinanced mortgages, dropped again, to $286 billion, the lowest level since 2000.
- Roughly 116,000 individuals had a new foreclosure notation added to their credit reports in the quarter. New foreclosures have been on a declining trend since Q2 2009 and are now at the lowest level in the data series.
- Delinquency transition rates for current mortgage accounts have returned to pre-crisis levels. About 1.2 percent of current mortgage balances transitioned into delinquency, the lowest rate seen since 2000.
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. households. 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.
