NEW YORK Nov 14 U.S. household debt rose in the
latest quarter by the most in more than five years, a sign that
Americans may be nearing the end of a multi-year belt-tightening
trend, data from the Federal Reserve Bank of New York showed on
Total consumer debt rose 1.1 percent to $11.28 trillion in
the third quarter, the New York Fed said in its quarterly
household debt and credit report. That marked the biggest
quarterly jump since the first three months of 2008.
Americans have consistently deleveraged in the years since
the housing collapse and financial crisis, and credit is well
below the peak of $12.68 trillion in the third quarter of 2008.
The increase in the third quarter suggests, however, that
the deleveraging cycle may be nearing its end. Americans boosted
credit card balances, borrowed to buy homes and cars and took on
more student debt.
"This quarter we observed an increase of household balances
across essentially all types of debt," Donghoon Lee, senior New
York Fed research economist, said in a statement. "With
non-housing debt consistently increasing and the factors pushing
down mortgage balances waning, it appears that households have
crossed a turning point in the deleveraging cycle."
Auto loan balances jumped by $31 billion, the 10th straight
quarterly increase and new loan originations increased to $97.4
billion, the highest since the third quarter of 2007, reflecting
a rebound in a key sector of the U.S. economy.
Reflecting another U.S. trend, student debt rose again with
outstanding balances up $33 billion to $1.03 trillion in the
third quarter. Delinquency rates increased, however, with 11.8
percent of loans behind by 90 days or more, up from 10.9 percent
in the second quarter.
Overall household delinquency rates dropped to 7.4 percent
in the three months to September from 7.6 percent in the second
quarter, extending a post-recession trend.
The report also showed outstanding mortgage balances rose by
$56 billion to $7.9 trillion, while 1.6 percent of existing
mortgages fell into delinquency, up from 1.5 percent the prior
quarter. Mortgages are the largest segment of consumer debt.
Foreclosures, which have been declining since the second
quarter of 2009, hit their lowest levels since the end of 2005.
Meanwhile, lenders made slightly fewer mortgages with
originations slipping to $549 billion from $589 billion.
Elsewhere, credit card balances edged up by $4 billion,
while the number of credit account inquiries over six months -
an indicator of consumer credit demand - rose to 168 million
from 159 million the prior quarter.