Consumer Debt Led by Student, Auto Loans Makes Biggest Jump Since 2008

Consumer Debt Led by Student, Auto Loans Makes Biggest Jump Since 2008Aggregate consumer debt — led by loans to finance college tuition and the purchase of automobiles — increased in the third quarter by $127 billion, the largest jump seen since the first quarter of 2008.
As of September 30, 2013, total consumer debt was $11.28 trillion, up by 1.1 percent from its level in the second quarter of 2013, according to new data from the Federal Reserve Bank of New York (FRBNY).
The New York Fed also found that foreclosures have been on a declining trend since the second quarter of 2009, and are now at the lowest levels seen since the end of 2005.
However, overall consumer debt remains 11 percent below its peak of $12.68 trillion in the third quarer of 2008.
Here are highlights from the FRBNY’s third quarter report:
Housing Debt

  • Originations, or appearances of new mortgage balances on consumer credit reports, dropped slightly to $549 billion.
  • About 168,000 individuals had a new foreclosure notation added to their credit reports between July 1 and September 30.
  • Mortgage delinquency rates have seen consistent improvements; 4.3% of mortgage balances were 90+ days delinquent during 2013Q3, compared to 4.9% in the previous quarter.
  • Delinquency rates on Home Equity Lines of Credit increased to 3.5%, up from 3.0% in 2013 Q2.

Student Loans and Credit Cards

  • Outstanding student loan balances reported on credit reports increased to $1.027 trillion as of September 30, 2013, a $33 billion increase from the second quarter.
  • The 90+ day delinquency rate increased, and is now at 11.8%
  • Balances on credit cards accounts increased by $4 billion.
  • The 90+ day delinquency rate on credit card balances fell to 9.4%.

Auto Loans and Inquiries

  • Auto loan originations increased in the third quarter of 2013 to $97.4 billion, the highest level since 2007 Q3.
  • The percentage of auto loan debt that is 90 or more days delinquent continued its downward trend, and now stands at 3.4%.
  • The number of credit inquiries within six months – an indicator of consumer credit

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