by Calculated Risk on 11/09/2021 11:17:00 AM
From the NY Fed: Total Household Debt Climbs to Over $15 trillion in Q3 2021, Driven by New Extensions of Credit
Mortgage balances–the largest component of household debt–rose by $230 billion and stood at $10.67 trillion at the end of September. Credit card balances increased by $17 billion, the same size increase as in the second quarter. Despite the increase, credit card balances remain $123 billion lower than they had been at the end of 2019. Auto loan balances increased by $28 billion in the third quarter. Student loan balances grew by $14 billion, coinciding with the academic borrowing year. In total, non-housing balances grew by $61 billion, with gains across all debt types.
Click on graph for larger image.
Here are three graphs from the report:
The first graph shows aggregate consumer debt increased in Q3. Household debt previously peaked in 2008, and bottomed in Q3 2013. Unlike following the great recession, there wasn’t a huge decline in debt during the pandemic.
From the NY Fed:
stand at $15.24 trillion. Balances are $1.1 trillion higher than at the end of 2019 and $890 billion higher than in 2020Q3, and $2.57
trillion higher, in nominal terms, than the $12.68 trillion peak seen in 2008.
The second graph shows the percent of debt in delinquency.
The overall delinquency rate decreased in Q3. From the NY Fed:
forbearances (provided by both the CARES Act and voluntarily offered by lenders), which protect borrowers’ credit records from the
reporting of skipped or deferred payments. As of late September, 2.7% of outstanding debt was in some stage of delinquency, a 2.0
percentage point decrease from the fourth quarter of 2019, just before the COVID-19 pandemic hit the United States. Of the $412
billion of debt that is delinquent, $302 billion is seriously delinquent (at least 90 days late or “severely derogatory”, which includes
some debts that have been removed from lenders’ books but upon which they continue to attempt collection).
The third graph shows Mortgage Originations by Credit Score.
From the NY Fed:
down slightly, they still remain very high and reflect a continuing high quality of newly opened mortgages as well as a higher share of
refinances. … There was $1.11 trillion in newly originated mortgage debt in 2021Q3, with 69% of it originated to borrowers with credit scores
over 760. 2% of newly originated mortgages were originated to subprime borrowers, a sharp contrast to the 12% average seen
There is much more in the report.
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