Household debts increased, led by mortgages and student loans. Meanwhile, there was also an increase in loan repayment rates.
Credit card Debt on the rise
BY DENNIS DOMRZALSKI
Americans piled on the debt in the first quarter of the year, but they’re more able to pay off that debt, according to new numbers released Tuesday by the Federal Reserve Bank of New York.
Total household debt grew by $136 billion, or 1.1 percent, during the quarter compared to the same period in 2015. It was led by a $120 billion increase in mortgage debt and a $29 billion increase in student loan debt. But credit card debt fell by $21 billion, and home equity lines of credit dropped by $2 billion.
Overall loan repayment rates increased to the quarter. Five percent of outstanding debt was in some stage of delinquency, the lowest amount since the second quarter of 2007. And, about 207,000 consumers had a bankruptcy notation added to their credit report during the quarter, a 19 percent decrease from the same quarter last year.
“Delinquency rates and the overall quality of outstanding debt continues to improve,” said Wilbert an der Klaauw, senior vice president at the New York Fed. “The proportion of overall debt that becomes newly delinquent has been on a steady downward trend and is at it slowest level since our series began in 1999. This improvement is in large part driven by mortgages.”
Total household debt was $12.25 trillion as of March, 3.3 percent below the peak of $12.68 trillion in the third quarter of 2008.
Here’s how that $12.25 trillion in debt works out by types of debt:
Mortgages: 68 percent; $8.37 trillion
Student loans: 10 percent; $1.26 trillion
Auto loans: 9 percent; $1.07 trillion
Credit cards: 6 percent; $712 billion
Home equity: 4 percent; $485 billion
Other: 3 percent; $367 billion
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