The Federal Reserve Bank of New York said U.S. household debt reached $19.105 trillion at September’s end, a series high, as the share of debt in delinquency rose. The figures show the scale of consumer borrowing and a modest increase in repayment distress.
The total climbed $334 billion, or 1.8%, from the second quarter and stood $520 billion above its level a year earlier. The New York Fed’s series goes back to 2003.
Mortgage balances rose $257 billion to $13.374 trillion. The New York Fed said about half of that increase reflected balances returning to credit reports after a gap in the previous quarter linked to a servicing transfer, which EconoTimes previously covered. Home equity lines of credit increased $23 billion to $481 billion, the largest rise since 2005. Credit-card balances added $22 billion to reach $1.285 trillion, auto loans gained $21 billion to $1.734 trillion and student debt rose $5 billion to $1.656 trillion.
The New York Fed also counted $595 billion in newly originated mortgages during the quarter. That measure covers loans newly entered into credit files, including refinancings, rather than the total outstanding mortgage balance; EconoTimes has covered the origination figures.
At September’s end, 5% of outstanding household debt was delinquent, 0.3 percentage point above the second quarter. More mortgage and auto balances moved into early delinquency, while the credit-card transition rate edged lower. More mortgage loans also moved into serious delinquency, though the New York Fed said the rate remained low by historical standards.
In an accompanying analysis, the New York Fed found that credit-card delinquency rose most sharply among borrowers in lower-income neighborhoods. It cited inflation and higher borrowing costs as headwinds, and said pandemic-era credit expansion and looser underwriting may have contributed to later distress, while macroeconomic conditions were likely the main driver.
New York Fed Economic Research Advisor Donghoon Lee said overall credit quality of housing loans remains “strong.”
