NEW YORK – 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 $193 billion (1.4%) to $14.15 trillion in the fourth quarter of 2019. This marks the 22nd consecutive quarter with an increase, and the total is now $1.5 trillion higher, in nominal terms, than the previous peak of $12.68 trillion in the third quarter of 2008. 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.
Mortgage balances—the largest component of household debt—rose by $120 billion in the fourth quarter to $9.56 trillion. Non-housing debt balances rose by $79 billion in the fourth quarter, with increases seen across a variety of debt types, including $16 billion in auto loans, $46 billion in credit card balances, and $10 billion in student loans.
Mortgage originations jumped to the highest volume seen since Q4 2005, rising to $752 billion in the fourth quarter from $528 billion in Q3 2019, due to a large increase in refinance activities. Among newly originating mortgage borrowers, the median credit score stood at 770, a 5-point increase from the Q3 2019. Auto loan originations remained high at $159 billion in the fourth quarter of 2019.
Transitions into delinquency among credit card borrowers deteriorated in the fourth quarter compared to Q3 2019.
“Mortgage originations, including refinances, increased significantly in the final quarter of 2019, with auto loan originations also remaining at the brisk pace seen throughout the year,” said Wilbert Van Der Klaauw, senior vice president at the New York Fed. “The data also show that transitions into delinquency among credit card borrowers have steadily risen since 2016, notably among younger borrowers.”
The New York Fed also issued an accompanying Liberty Street Economics blog post that explores the credit profiles and behaviors of first-time borrowers.
The Report includes a one-page summary of key takeaways and their supporting data points. Overarching trends from the Report’s summary include:
Housing Debt
- Transitions into delinquency among current mortgages were largely unchanged in Q4 2019 compared to recent quarters, as 1.0% of mortgage balances became delinquent (30+ days late).
- Transitions from early delinquency deteriorated in the fourth quarter, as 17.4% of mortgages in early delinquency (30-60 days late) transitioned into 90+ days delinquent.
- Approximately 71,000 individuals had a new foreclosure notation added to their credit reports between October 1, 2019 and December 31, 2019, remaining very low by historical standards.
Non-Housing Debt
- Outstanding student debt stood at $1.51 trillion in the fourth quarter of 2019, an increase of $10 billion from Q3 2019.
- 11.1% of aggregate student debt was 90+ days delinquent or in default in Q4 2019. The transition rate into 90+ day delinquency among student loans was 9.2%.
- Auto loan balances stood at $1.33 trillion in Q4 2019, an increase of $16 billion from the previous quarter. The transition rate into serious (90+ days) delinquency among auto loans rose to 2.36% in the fourth quarter from 2.34% in Q3 2019.
Account Closings, Bankruptcy Notations and Credit Inquiries
- The number of credit inquiries within the past six months—an indicator of consumer credit demand—was at 137 million in Q4 2019.
- Approximately 202,000 consumers had a bankruptcy notation added to their credit reports in the fourth quarter of 2019, an increase from the 195,000 in Q4 2018.
- Account closings declined in the fourth quarter with 207 million accounts closed within the past 12 months, consistent with the rate seen in the past 2 years.
Household Debt and Credit Developments as of Q4 2019
| CATEGORY | QUARTERLY CHANGE* (BILLIONS $) | ANNUAL CHANGE** (BILLIONS $) | TOTAL AS OF Q4 2019 (TRILLIONS $) |
| MORTGAGE DEBT | (+) $120 | (+) $433 | $9.56 |
| HOME EQUITY LINE OF CREDIT | (-) $6 | (-) $22 | $0.39 |
| STUDENT DEBT | (+) $10 | (+) $51 | $1.51 |
| AUTO DEBT | (+) $16 | (+) $57 | $1.33 |
| CREDIT CARD DEBT | (+) $46 | (+) $57 | $0.93 |
| OTHER | (+) $7 | (+) $25 | $0.43 |
| TOTAL DEBT | (+) $193 | (+) $601 | $14.15 |
*Change from Q3 2019 to Q4 2019
** Change from Q4 2018 to Q4 2019
Flow into Serious Delinquency (90 days or more delinquent)
| CATEGORY 2 | Q3 2019 | Q4 2019 |
| MORTGAGE DEBT | 0.99% | 1.10% |
| HOME EQUITY LINE OF CREDIT | 0.83% | 0.85% |
| STUDENT LOAN DEBT 3 | 9.26% | 9.21% |
| AUTO LOAN DEBT | 2.34% | 2.36% |
| CREDIT CARD DEBT | 5.16% | 5.32% |
| OTHER | 4.67% | 4.70% |
| ALL | 2.27% | 2.36% |
- Annualized as a four-quarter moving sum.
- Rates represent annualized shares of balances transitioning into delinquency. Flow into serious delinquency is computed as the balances that have newly become at least 90 days late in the reference quarter divided by the balances that were current of less than 90 days past due in the previous quarter.
- As explained in a previous report, delinquency rates for student loans are likely to understate effective 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.
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. consumers. 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 Debt and Credit Report web page and the full report is available for download.