Friday, November 20, 2015

NY Fed: Household Debt increased $212 billion Q3 2015

by Bill McBride on 11/20/2015 02:03:00 PM

The Q3 report was released yesterday: Household Debt and Credit Report.

From the NY Fed: Just Released: New and Improved Charts and Data on Auto Loans

Today, the New York Fed announced that household debt increased by a robust $212 billion in the third quarter of 2015. Both mortgage and auto loan originations increased, as auto originations reached a ten-year high and new mortgage lending appears to have finally recovered from the very low levels seen in the past year. This quarter, we’re introducing an improved estimate of auto loan originations, some new charts, and some fresh data on the auto loan market. The Quarterly Report on Household Debt and Credit and this analysis use our Consumer Credit Panel data, which is itself based on Equifax credit data.
The continued growth in auto lending, subprime lending in particular, is a topic that we’ve monitored closely over the past few years, and we’re just now seeing some increase in delinquency rates on loans made by auto finance companies. Because there are a large number of subprime borrowers in this sector, these borrowers may be more sensitive to developments in the labor market, and the increases in the outstanding balances of these borrowers may pose some risks. That said, any comparison with the subprime mortgage market of the 2000s that led to the crisis should note that the volume of subprime mortgages outstanding in 2007 was nearly four times the volume of subprime auto loans outstanding today ($250 billion).
emphasis added
Total Household Debt Click on graph for larger image.

Here are two graphs from the report:

The first graph shows aggregate consumer debt increased in Q3.  Household debt peaked in 2008, and bottomed in Q2 2013.

Even mortgage debt is increasing now, from the NY Fed:
Mortgage balances, the largest component of household debt, increased in the third quarter. Mortgage balances shown on consumer credit reports stood at $8.26 trillion, a $144 billion increase from the second quarter of 2015.
Delinquency Status The second graph shows the percent of debt in delinquency. The percent of delinquent debt is declining, although there is still a large percent of debt 90+ days delinquent (Yellow, orange and red). 

The overall delinquency rate decreased slightly in Q3 to 5.6%.  From the NY Fed:
Overall delinquency rates improved modestly in 2015Q3. As of September 30, 5.6% of outstanding debt was in some stage of delinquency. Of the $672 billion of debt that is delinquent, $455 billion is seriously delinquent (at least 90 days late or “severely derogatory”).
There are a number of credit graphs at the NY Fed site.