Significant Changes in Debt Composition and Substantial Increases in Aggregate Household Debt in 2016 Overall
NEW YORK – The Federal Reserve Bank of New York today issued its Quarterly Report on Household Debt and Credit, which reported that total household debt increased substantially by $226 billion (a 1.8% increase) to $12.58 trillion during the fourth quarter of 2016. This marked the largest quarterly increase in total household debt since the fourth quarter of 2013, and debt today is now just 0.8% below its peak of $12.68 trillion reached in the third quarter of 2008. Every type of debt increased since the previous quarter, with a 1.6% increase in mortgage debt, 1.9% increase in auto loan balances, a 4.3% increase in credit card balances, and a 2.4% percent increase in student loan balances. This boost in balances was in part driven by new extensions of credit, with a large increase in the volume of mortgage originations and a continuation in the strong recent trend in auto loan originations. This report is based on data from the New York Fed's Consumer Credit Panel, a nationally representative sample of individual- and household-level debt and credit records drawn from anonymized Equifax credit data.
The New York Fed also issued a new blog in conjunction with the report, which highlights how household debt has evolved in 2016 overall, and how its current composition and performance compare to when total debt previously peaked in 2008.
"Debt held by Americans is approaching its previous peak, yet its composition today is vastly different as the growth in balances has been driven by non-housing debt," said Wilbert van der Klaauw, senior vice president at the New York Fed. "Since reaching a trough in mid-2013, the rebound in household debt has been led by student debt and auto debt, with only sluggish growth in mortgage debt."
Key findings from this quarter can be found in the front of the Report. These findings include:
Housing Debt
- Mortgage balances increased and mortgage originations reached the highest level seen since the beginning of the Great Recession.
- Mortgage delinquencies remained mostly unchanged and the delinquency transition rates for current mortgage accounts improved slightly.
- New foreclosure notations reached another new low for the 18-year history of this series.
Non-Housing Debt
- Auto loan balances continued their steady rise and auto loan originations for 2016 reached a new annual record in the 18-year history of this series.
- Credit card balances increased and the aggregate credit card limit increased for the 16th consecutive quarter.
- Student loan balances increased—marking an increase in every year throughout the 18-year history of this series.
Bankruptcies & Delinquencies Overall
- Overall delinquency rates were roughly stable this quarter.
- This quarter saw the lowest number of bankruptcy notations in the 18-year history of this series, continuing an overall downward trend since the financial crisis.
Household Debt and Credit Developments as of Q4 2016
| Category | Quarterly Change* | Annual Change** | Total as of Q4 2016 |
| Mortgage Debt | (+) $130 billion | (+) $231 billion | $8.48 trillion |
| Home Equity Line of Credit | (+) $1 billion | (-) $14 billion | $473 billion |
| Student Loan Debt | (+) $31 billion | (+) $78 billion | $1.31 trillion |
| Auto Loan Debt | (+) $22 billion | (+) $93 billion | $1.16 trillion |
| Credit Card Debt | (+) $32 billion | (+) $46 billion | $779 billion |
| Total Debt | (+) $226 billion | (+) $460 billion | $12.58 trillion |
*Change from Q3 2016 to Q4 2016
**Change from Q4 2015 to Q4 2016
90+ day delinquency rates (known as "seriously delinquent")
| Category1 | Q3 2016 | Q4 2016 |
| Mortgage Debt | 1.6% | 1.6% |
| Home Equity Line of Credit | 2.0% | 2.1% |
| Student Loan Debt 2 | 10.9% | 11.2% |
| Auto Loan Debt | 3.6% | 3.8% |
| Credit Card Debt | 7.1% | 7.1% |
| All | 3.3% | 3.3% |
1Delinquency rates are computed as the proportion of the total outstanding debt balance that is at least 90 days past due.
2As explained in a previous report, delinquency rates for student loans are likely to understate effective delinquency rates because about half of these loans are currently in deferment, in grace periods or in forbearance and therefore temporarily not in the repayment cycle. This implies that among loans in the repayment cycle delinquency rates are roughly twice as high.
Household Debt and Credit Report »
About the report
The Federal Reserve Bank of New York's Household Debt and Credit Report provides unique data and insight into the credit conditions and activity of U.S. consumers. Based on data from the New York Fed's Consumer Credit Panel, a nationally representative sample drawn from anonymized Equifax credit data, the report provides a quarterly snapshot of household trends in borrowing and indebtedness, including data about mortgages, student loans, credit cards, auto loans and delinquencies. The report aims to help community groups, small businesses, state and local governments and the public to better understand, monitor and respond to trends in borrowing and indebtedness at the household level. Sections of the report are presented as interactive graphs on the New York Fed's Household Credit web page and the full report is available for download.
