Household debt rose $114 billion to a record $12.84 trillion in the second quarter, driven by increases in mortgage debt, auto loans and credit card balances, according to a new report from the Federal Reserve Bank of New York.
It was the twelfth consecutive quarterly increase in household debt levels, which stood a little more than 1% above the previous peak set almost nine years ago and 0.9% above the first-quarter level.
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All major categories of household debt rose except home equity lines of credit, which fell slightly to $452 billion.
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Mortgage debt remained the biggest burden for households, topping $8.6 trillion, followed by student loan debt ($1.34 trillion) and auto loan debt (1.19 trillion).
Auto loan debt led the percentage increase from a year ago, up 7.8%, followed by credit card debt, up 7.5%, and student loan debt, up almost 7%.
Delinquency rates were little changed from the previous quarter, but there were some early signs of deterioration. The annualized percent of newly delinquent student loan, auto and mortgage debt — which the Fed refers to as the “delinquency flow” — rose moderately, but that was not the case for credit card debt.
The share of credit card debt that was newly delinquent, at least 30 days overdue, rose to 6.19% from 5.07% a year ago and 5.9% in Q1. The comparable rate for credit card debt more than 90 days overdue was 4.42% for the second quarter, up from 3.51% a year ago and 4.08% in the first quarter.
“While relatively low, credit card delinquency flows climbed notably over the past year,” said Andrew Haughwout, senior vice president at the New York Fed, in a statement. He said the increase, against a backdrop of “loosening lending standards” … can be an early indicator of future trends” that the Fed will closely monitor.
Student loan debt, however, continues to have the highest rates of delinquency. Roughly 10% of student loan debt was newly delinquent, with payments more than 30 days and 90 days overdue. Also, the amount of student loan debt 90 days overdue compared to the total amount of outstanding debt – known as the 90-day delinquency rate — was 11.2% in the second quarter.
Moreover, these numbers likely understate student loan delinquencies because about half of those loans outstanding are not currently in a repayment cycle due to deferments, grace periods or forbearance, according to the New York Fed.