by Calculated Risk on 8/05/2025 11:13:00 AM

From the NY Fed: Household Debt Growth Remains Steady; Auto Loan Originations Pick Up

The Federal Reserve Bank of New York’s Center for Microeconomic Data today issued its Quarterly Report on Household Debt and Credit. The report shows total household debt increased by $185 billion (1%) in Q2 2025, to $18.39 trillion. The report is based on data from the New York Fed’s nationally representative Consumer Credit Panel. It includes a one-page summary of key takeaways and their supporting data points.

The New York Fed also issued an accompanying Liberty Street Economics blog post analyzing borrower trends in the mortgage market across balances, delinquency rates, credit scores, and geography.

“This quarter’s flow of household debt into serious delinquency was mixed across debt types, with credit card and auto loans holding steady, student loans continuing to rise, and mortgages edging up slightly,” said Joelle Scally, Economic Policy Advisor at the New York Fed. “Despite the recent uptick in mortgage delinquency, overall mortgage performance remains strong by historical standards.”

Mortgage balances grew by $131 billion in the second quarter and totaled $12.94 trillion at the end of June 2025. Credit card balances rose by $27 billion from the previous quarter and stood at $1.21 trillion. Auto loan balances also increased by $13 billion and totaled $1.66 trillion. HELOC balances rose by $9 billion to $411 billion, representing the thirteenth consecutive quarterly increase. Student loan balances edged up by $7 billion and stood at $1.64 trillion. In total, non-housing balances rose by $45 billion, a 0.9% increase from Q1 2025.

The pace of mortgage originations increased slightly, with $458 billion newly originated mortgages in Q2 2025. There were $188 billion in new auto loans and leases appearing on credit reports during the second quarter, an increase from the $166 billion observed in the first quarter of 2025. Aggregate limits on credit card accounts continued to rise by $78 billion, representing a 1.5% increase from the previous quarter.

Aggregate delinquency rates remained elevated in the second quarter, with 4.4% of outstanding debt in some stage of delinquency. Transition into early delinquency held steady for nearly all debt types except for student loans. Student loans saw another uptick in the rate at which balances went from current to delinquent due to the resumption of reporting of delinquent student loans. Transitions into serious delinquency were mixed across debt types: auto loans and credit card debt were largely stable, mortgages and HELOCs edged up slightly, and student loans rose sharply.
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Click on graph for larger image.

Here are two graphs from the report:

The first graph shows household debt increased in Q2.  Household debt previously peaked in 2008 and bottomed in Q3 2013. Unlike following the great recession, there wasn't a decline in debt during the pandemic.

From the NY Fed:

Aggregate nominal household debt balances increased by $185 billion in the second quarter of 2025, a 1% rise from 2025Q1. Balances now stand at $18.39 trillion and have increased by $4.24 trillion since the end of 2019, just before the pandemic recession.

The second graph shows the percent of debt in delinquency.

The overall delinquency rate increased in Q1.  From the NY Fed:

Aggregate delinquency rates remained elevated in the second quarter of 2025. As of the end of June, 4.4% of outstanding debt was in some stage of delinquency, which is 0.1 percentage point higher than the first quarter. Transition into early delinquency held steady for nearly all debt types; the exception was for student loans, which saw another uptick in the rate at which balances went from current to delinquent due to the resumption of reporting of delinquent student loans on credit reports after a nearly 5-year pause due to the pandemic. Transition rates into serious delinquency, defined as 90 or more days past due, were largely stable for auto loans and credit cards; edged up slightly for mortgages and HELOCs; and rose sharply for student loans.

There is much more in the report.

by Calculated Risk on 8/05/2025 10:00:00 AM

(Posted with permission). The ISM® Services index was at 50.1%, down from 50.8% last month. The employment index decreased to 46.4%, from 47.2%. Note: Above 50 indicates expansion, below 50 in contraction.

From the Institute for Supply Management: Services PMI® at 50.1% July 2025 Services ISM® Report On Business®

Economic activity in the services sector grew in July for the second consecutive month, say the nation's purchasing and supply executives in the latest Services ISM® Report On Business®. The Services PMI® indicated expansion at 50.1 percent, above the 50-percent breakeven point for the 12th time in the last 13 months.

The report was issued today by Steve Miller, CPSM, CSCP, Chair of the Institute for Supply Management® (ISM®) Services Business Survey Committee: “In July, the Services PMI® registered 50.1 percent, 0.7 percentage point lower than the June figure of 50.8 percent but in expansion territory for the second month in a row. The Business Activity Index remained in expansion in July, registering 52.6 percent, 1.6 percentage points lower than the reading of 54.2 percent recorded in June. This index has not been in contraction territory since May 2020. The New Orders Index also remained in expansion territory in July, recording a reading of 50.3 percent, a drop of 1 percentage point from the June figure of 51.3 percent. The Employment Index was in contraction territory for the second month in a row and the fourth time in the last five months; the reading of 46.4 percent is 0.8 percentage point lower than the 47.2 percent recorded in June.

“The Supplier Deliveries Index registered 51 percent, 0.7 percentage point higher than the 50.3 percent recorded in June. This is the eighth consecutive month that the index has been in expansion territory, indicating slower supplier delivery performance. (Supplier Deliveries is the only ISM® Report On Business® index that is inversed; a reading of above 50 percent indicates slower deliveries, which is typical as the economy improves and customer demand increases.)

“The Prices Index registered 69.9 percent in July, a 2.4-percentage point increase from June’s reading of 67.5 percent. The index has exceeded 60 percent for eight straight months, with July’s reading the highest since October 2022 (70.7 percent).
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This was well below consensus expectations, and employment was very weak, and prices paid high.

by Calculated Risk on 8/05/2025 08:30:00 AM

The Census Bureau and the Bureau of Economic Analysis reported:

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $60.2 billion in June, down $11.5 billion from $71.7 billion in May, revised.

June exports were $277.3 billion, $1.3 billion less than May exports. June imports were $337.5 billion, $12.8 billion less than May imports.
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Click on graph for larger image.

Exports and imports decreased in June.

Exports were up 3.3% year-over-year; imports were down 1.4% year-over-year.

Imports increased sharply earlier this year as importers rushed to beat tariffs.  

The second graph shows the U.S. trade deficit, with and without petroleum.

The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.

Note that net, exports of petroleum products are positive and have been increasing.

The trade deficit with China decreased to $9.5 billion from $22.8 billion a year ago.

by Calculated Risk on 8/04/2025 08:12:00 PM

From Matthew Graham at Mortgage News Daily: Lowest Mortgage Rates Since Early October

Friday's reaction was so big that the average mortgage lender didn't fully adjust their rate offerings to match the market movement. This is typical of very large swings in bonds. It also meant that we merely needed today's bond market levels to hold steady in order for rates to continue lower and that's exactly what happened.

In fact, bonds ultimately improved just a hair, but even before that, mortgage lenders were out with their lowest rates since early October. [30 year fixed 6.57%]
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Tuesday:
• At 8:30 AM ET, Trade Balance report for June from the Census Bureau. The consensus is the trade deficit to be $67.6 billion.  The U.S. trade deficit was at $71.5 Billion the previous month.

• At 10:00 AM, the ISM Services Index for July.   The consensus is for a reading of 51.5, up from 50.8.

• At 11:00 AM, NY Fed: Q2 Quarterly Report on Household Debt and Credit

by Calculated Risk on 8/04/2025 03:47:00 PM

This graph shows heavy truck sales since 1967 using data from the BEA. The dashed line is the July 2025 seasonally adjusted annual sales rate (SAAR) of 455 thousand.

Note: "Heavy trucks - trucks more than 14,000 pounds gross vehicle weight."

Click on graph for larger image.

Heavy truck sales were at 455 thousand SAAR in July, up from 443 thousand in June, and down 12.0% from 517 thousand SAAR in July 2024.

Year-to-date (NSA) sales are down 6.8% through July.

Usually, heavy truck sales decline sharply prior to a recession and sales have been a little soft recently.  

by Calculated Risk on 8/04/2025 02:00:00 PM

From the Federal Reserve: The July 2025 Senior Loan Officer Opinion Survey on Bank Lending Practices

The July 2025 Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS) addressed changes in the standards and terms on, and demand for, bank loans to businesses and households over the past three months, which generally correspond to the second quarter of 2025.

Regarding loans to businesses over the second quarter, survey respondents reported, on balance, tighter lending standards and weaker demand for commercial and industrial (C&I) loans to firms of all sizes. Furthermore, banks generally reported tighter standards and weaker demand for commercial real estate (CRE) loans.

For loans to households, banks reported basically unchanged lending standards and weaker demand for residential mortgage loans, on balance. In addition, banks reported tighter lending standards and stronger demand for home equity lines of credit (HELOCs). For consumer loans, standards tightened for credit card loans and remained basically unchanged for auto and other consumer loans. Meanwhile, demand weakened for credit card and other consumer loans and strengthened for auto loans.

The July SLOOS included a set of special questions inquiring about the current level of lending standards relative to the midpoint of the range over which banks’ standards have varied since 2005. Banks reported that, on balance, levels of standards are currently on the tighter end of the range for all loan categories. Compared with the July 2024 survey, banks reported easier levels of standards for most loan categories except residential real estate (RRE) loans, for which levels of standards were comparable with July 2024.
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Click on graph for larger image.

This graph on Residential Real Estate demand is from the Senior Loan Officer Survey Charts.

This graph is for demand and shows that demand has been weak since late 2021.

The left graph is from 1990 to 2014.  The right graph is from 2015 to Q1 2025.

Only demand for HELOCs was reported as stronger.

by Calculated Risk on 8/04/2025 11:31:00 AM

Today, in the Calculated Risk Real Estate Newsletter: How Much will the Fannie & Freddie Conforming Loan Limit Change for 2026?

A brief excerpt:

With house prices up low-single digits over the last year through mid-year, an interesting question is: How much will the Fannie & Freddie conforming loan limits (CLL) change for 2026? And how much will the FHA insured loan limits change?

First, there are different loan limits for various geographical areas. There are also different loan limits depending on the number of units (from 1 to 4 units). For example, currently the CLL is $806,500 for one-unit properties in most areas. For high-cost areas like Los Angeles County, the CLL is $1,209,750 for one-unit properties (50% higher than the baseline CLL).
...
Note that during periods when house prices decline, the CLL is not reduced. The CLL was at $417,000 from 2006 through 2016 and only increased slightly in 2017 as the house price index caught back up to the previous high reached during the housing bubble. This graph shows the CLL since 1979. The CLL was unchanged from 2006 though 2016.

We need the house price data through September 2025 to calculate the conforming loan limit for 2026. This quarterly data will be released in late November.

There is much more in the article.

by Calculated Risk on 8/04/2025 10:35:00 AM

The BEA reported this morning that light vehicle sales were at 16.41 million in July on a seasonally adjusted annual rate basis (SAAR).

This was up 7.1% from the sales rate in June, and up 3.7% from July 2024.

Click on graph for larger image.

This graph shows light vehicle sales since 2006 from the BEA (blue) through July (red).

Vehicle sales were over 17 million SAAR in March and April as consumers rushed to "beat the tariffs".

Then sales were depressed in May and June. 

The second graph shows light vehicle sales since the BEA started keeping data in 1967.

Sales in July were at the consensus forecast of 16.4 million SAAR.

by Calculated Risk on 8/04/2025 08:11:00 AM

Altos reports that active single-family inventory was up 0.6% week-over-week.

Inventory is now up 38.6% from the seasonal bottom in January.   Usually, inventory is up about 22% from the seasonal low by this week in the year.   So, 2025 is seeing a larger than normal increase in inventory.

The first graph shows the seasonal pattern for active single-family inventory since 2015.

Click on graph for larger image.

The red line is for 2025.  The black line is for 2019.  

Inventory was up 26.6% compared to the same week in 2024 (last week it was up 27.0%), and down 10.0% compared to the same week in 2019 (last week it was down 10.3%). 

It now appears inventory will be close to 2019 levels towards the end of 2025.

This second inventory graph is courtesy of Altos Research.

As of August 1st, inventory was at 866 thousand (7-day average), compared to 860 thousand the prior week. 

Mike Simonsen discusses this data and much more regularly on YouTube

by Calculated Risk on 8/03/2025 06:14:00 PM

Weekend:
• Schedule for Week of August 3, 2025

Monday:
• At 2:00 PM ET, Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS) for July.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are down 9 and DOW futures are down 43 (fair value).

Oil prices were up over the last week with WTI futures at $67.33 per barrel and Brent at $69.67 per barrel. A year ago, WTI was at $75, and Brent was at $78 - so WTI oil prices are down about 11% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.13 per gallon. A year ago, prices were at $3.46 per gallon, so gasoline prices are down $0.33 year-over-year.