Tuesday, February 12, 2019

NY Fed Q4 Report: "Total Household Debt Rises as 2018 Marks the Ninth Year of Annual Growth in New Auto Loans"

by Calculated Risk on 2/12/2019 12:38:00 PM

From the NY Fed: Total Household Debt Rises as 2018 Marks the Ninth Year of Annual Growth in New Auto Loans

The Federal Reserve Bank of New York’s Center for Microeconomic Data today issued its Quarterly Report on Household Debt and Credit, which shows that total household debt increased by $32 billion (0.2%) to $13.54 trillion in the fourth quarter of 2018. It was the 18th consecutive quarter with an increase and the total is now $869 billion higher than the previous peak of $12.68 trillion in the third quarter of 2008. Furthermore, overall household debt is now 21.4% above the post-financial-crisis trough reached during the second quarter of 2013. The Report is based on data from the New York Fed’s Consumer Credit Panel, a nationally representative sample of individual- and household-level debt and credit records drawn from anonymized Equifax credit data.
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Mortgage originations declined to $401 billion from $445 billion, the lowest level seen in nearly four years.

Mortgage delinquencies were roughly flat, with 1.1% of mortgage balances 90 or more days delinquent.
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 Q4.  Household debt previously peaked in 2008, and bottomed in Q2 2013.

From the NY Fed:
Aggregate household debt balances ticked up in the fourth quarter of 2018 for the 18th consecutive quarter, and are now $869 billion (6.9%) higher than the previous (2008Q3) peak of $12.68 trillion. As of December 31, 2018, total household indebtedness was $13.54 trillion, a $32 billion (0.2%) increase from the third quarter of 2018. Overall household debt is now 21.4% above the 2013Q2 trough.

Mortgage balances shown on consumer credit reports on December 31 stood at $9.1 trillion, essentially unchanged from the third quarter of 2018. Balances on home equity lines of credit (HELOC) continued their declining trend from 2009 with a drop of $10 billion in the fourth quarter and are now at $412 billion, the lowest level seen in 14 years. Non-housing balances increased by $58 billion in the fourth quarter, with auto loans increasing by $9 billion, credit card balances going up by $26 billion, and student loan balances by $15 billion. The increase in credit card balances is consistent with seasonal patterns but marks the first time credit card balances re-touched the 2008 peak; card balances now stand at $870 billion.
Delinquency Status The second graph shows the percent of debt in delinquency. There is still a larger than normal percent of debt 90+ days delinquent (Yellow, orange and red).

The overall delinquency rate decreased slightly in Q4.  From the NY Fed:
Aggregate delinquency rates remained steady in the fourth quarter of 2018. As of December 31, 4.7% of outstanding debt was in some stage of delinquency, unchanged from the third quarter. Of the $630 billion of debt that is delinquent, $416 billion is seriously delinquent (at least 90 days late or “severely derogatory”). The flow into 90+ day delinquency for credit card balances has been rising since 2017, while the flow into 90+ day delinquency for auto loan balances has been slowly trending upward since 2012.

About 195,000 consumers had a bankruptcy notation added to their credit reports in 2018Q4, five thousand fewer than the 200,000 individuals who filed in the 4th quarter of 2017. New bankruptcy notations have been at historically low levels since 2016.
There is much more in the report.