by Calculated Risk on 8/03/2021 11:13:00 AM
Mortgage balances–the largest component of household debt–rose by $282 billion and stood at $10.44 trillion at the end of June. Credit card balances started to tick back up, increasing by $17 billion in the second quarter. Despite the increase, credit card balances were still $140 billion lower than they had been at the end of 2019. Auto loans increased by $33 billion, while student loan balances decreased by $14 billion. In total, non-housing balances (including credit card, auto loan, student loan, and other debts) grew by $44 billion, with increases in auto loans and credit card balances offsetting the decline in student loan balances.
Here are two graphs from the report:
The first graph shows aggregate consumer debt increased in Q2. 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:
now stand at $14.96 trillion. Balances are $812 billion higher than at the end of 2019 and $691 billion higher than 2020Q2. The 2.1%
increase in aggregate balances was the largest seen since 2013Q4 and marked the largest nominal increase in debt balances since
The overall delinquency rate decreased in Q2. From the NY Fed:
uptake in 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 June, 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 pandemic hit the United States. Of the $405 billion of
debt that is delinquent, $316 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).
From the NY Fed:
786, reflecting a continuing high quality of underwriting standards and higher shares of refinances. … There was $1.22 trillion in newly originated mortgage debt in 2021Q2, with 71% of it originated to borrowers with credit scores over 760.
There is much more in the report.