America Has Lower Household Debt, but Higher Personal Debt

There is a report on the national household debt from the Federal Reserve Bank of New York showing a decrease in household debt by Americans. Today's report in the third quarter of 2012 showed a decrease in overall debt balance, but that is despite a rise in non-real estate debt. In short, consumer and personal deb is up while debt pertaining to housing is down.

Data was taken from the New York Fed's Consumer Credit Panel, a nationally representative random sample drawn from Equifax credit report data. All in all, total consumer indebtedness shrank by some $74 billion to $11.31 trillion and that represents a decline of 0.7% from the prior quarter.

Non-real estate household debt was shown in this report to have risen by 2.3% to $2.7 trillion due to a boost in student loans of $42 billion, auto loans with a gain of $18 billion, and credit card balances gaining by $2 billion. The total reduction in overall debt was attributed to a decrease in mortgage debt of $120 billion as well as a drop in home equity lines of credit of $16 billion. That drop in debt tied to housing was despite mortgage originations increasing for a fourth consecutive quarter.

Here are some highlights featured in the report:

  • Outstanding student loan debt now stands at $956 billion, an increase of $42 billion since last quarter ($23 billion is new debt while the remaining $19 billion is attributed to previously defaulted student loans that have been updated on credit reports this quarter). The percent of student loan balances 90+ days delinquent increased to 11% this quarter.
  • Outstanding auto loans of $768 billion were the highest in nearly four years.
  • Mortgage debt at $8.03 trillion is at its lowest level since 2006 and delinquency rates for mortgages decreased from 6.3% to 5.9%. New foreclosures are returning to their pre-crisis levels (about 242,000 consumers had a new foreclosure added to their credit report) to the lowest in nearly six years.
  • Mortgage originations (new mortgages on consumer credit reports) rose for the fourth consecutive quarter to $521 billion.

FULL HOUSEHOLD DEBT REPORT

JON C. OGG


Filed under: 24/7 Wall St. Wire, Consumer Product, Economy, Housing Tagged: featured
Read Full Story

Markets

NASDAQ 6,875.80 13.48 0.20%
S&P 500 2,662.85 -1.26 -0.05%
DJIA 24,585.43 80.63 0.33%
NIKKEI 225 22,694.45 -63.62 -0.28%
HANG SENG 29,140.52 -81.58 -0.28%
DAX 13,125.64 -57.89 -0.44%
USD (per EUR) 1.18 0.00 -0.08%
USD (per CHF) 0.99 0.00 -0.05%
JPY (per USD) 112.73 -0.05 -0.04%
GBP (per USD) 1.34 0.00 0.20%

Can't get enough business news?

Sign up for Finance Report by AOL and get everything from retailer news to the latest IPOs delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.