NEW YORK – The Federal Reserve Bank of New York's Center for Microeconomic Data today issued its Quarterly Report on Household Debt and Credit. The report shows that total household debt increased by $206 billion (1.4%) to $14.56 trillion in the fourth quarter of 2020, driven in part by a steep increase in mortgage originations. The total debt balance is now $414 billion higher than the year prior. The Report is based on data from the New York Fed's Consumer Credit Panel, a nationally representative random sample of individual- and household-level debt and credit records drawn from anonymized Equifax credit data.
Mortgage balances—the largest component of household debt—surpassed $10 trillion in the fourth quarter, increasing by $182 billion to $10.04 trillion at the end of December. While credit card balances increased by $12 billion over the quarter, they were $108 billion lower than they had been at the end of 2019, the largest year over year decline since the series began in 1999. This overall decline is consistent with continued weakness in consumer spending and revolving balance paydowns by card holders.
Auto and student loan balances increased by $14 billion and $9 billion, respectively. In total, non-housing balances (including credit card, auto loan, student loan, and other debts) increased by $37 billion during the fourth quarter but remained below end-2019 levels.
Newly originated mortgages reached a record high and auto loan originations reached their second highest quarterly volume since 2000. Mortgage originations, which include refinances, were at $1.2 trillion, surpassing in nominal terms the volumes seen during the historic refinance boom in 2003Q3. Auto loan originations, which includes both loans and leases, were down slightly from the record high seen in the third quarter but were at the second highest level for the series, at $162 billion.
"2020 ended with a substantial increase in new extensions of credit, driven by record highs of new mortgages and auto loan originations," said Wilbert Van Der Klaauw, senior vice president at the New York Fed. "Notably, the overall median mortgage origination credit scores jumped up, reflecting a high share of refinances."
Aggregate delinquency rates continued to decline in the fourth quarter reflecting an uptake in forbearances which were provided by the CARES Act or voluntarily offered by lenders. The uptake in forbearances continues to be visible in the delinquency transition rates for mortgages, as the share of mortgages that transitioned to early delinquency ticked down to 0.4%. As of late December, the share of outstanding debt that was in some stage of delinquency was 1.6 percentage points lower than the rate observed at end-2019 before the COVID-19 pandemic hit the United States. About 121,000 consumers had a bankruptcy notation added to their credit reports, a decline from the previous quarter and a new series low.
The share of federal student loans and federally-backed mortgages transitioning into delinquency both continued to fall, as they remained covered by CARES Act forbearances. Auto loans and credit card delinquency transition rates also continued to decline, reflecting the impact of government stimulus programs and bank-offered forbearance options for troubled borrowers.
The New York Fed also issued an accompanying Liberty Street Economics blog post that examines mortgage origination volume by purpose and credit score.
The Report includes a one-page summary of key takeaways and their supporting data points. Overarching trends from the Report's summary include:
Housing Debt- There was $1.2 trillion in newly originated mortgage debt in 2020Q4.
- About 30,000 individuals had a new foreclosure notation added to their credit reports during the second half of 2020, by far the lowest six months we have seen since the beginning of the series in 1999.
- Outstanding student loan debt stood at $1.56 trillion in the fourth quarter, a $9 billion increase from the third quarter.
- About 6.5% of aggregate student debt was 90+ days delinquent or in default in 2020Q4. The lower level of student debt delinquency reflects a Department of Education decision to report current status on loans eligible for CARES Act forbearances.
- The number of credit inquiries within the past six months – an indicator of consumer credit demand – was at 120 million, a modest decline from the previous quarter. Inquiries have been subdued since the second quarter of 2020 when the large effects of the pandemic hit the U.S.
- Account openings declined by 5 million accounts to 190 million following larger drops in the second and third quarters of 2020.
| Category | Quarterly Change * (Billions $) | Annual Change** (Billions $) | Total As Of Q4 2020 (Trillions $) |
| Mortgage Debt | (+) $182 | (+) $486 | $10.04 |
| Home Equity Line Of Credit | (-) $13 | (-) $41 | $0.35 |
| Student Debt | (+) $9 | (+) $47 | $1.56 |
| Auto Debt | (+) $14 | (+) $43 | $1.37 |
| Credit Card Debt | (+) $12 | (-) $108 | $0.82 |
| Other | (+) $2 | (-) $13 | $0.42 |
| Total Debt | (+) $206 | (+) $414 | $14.56 |
** Change from Q4 2019 to Q4 2020
Flow into Serious Delinquency (90 days or more delinquent)
| Category 1 | Q4 2019 | Q4 2020 |
| Mortgage Debt | 1.10% | 0.65% |
| Home Equity Line Of Credit | 0.85% | 0.59% |
| Student Loan Debt | 9.21% | 2.76% |
| Auto Loan Debt | 2.36% | 1.84% |
| Credit Card Debt | 5.32% | 4.12% |
| Other | 4.70% | 3.65% |
| ALL | 2.36% | 1.25% |
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 Debt and Credit Report web page and the full report is available for download.
