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 $313 billion (2.1%) to $14.96 trillion in the second quarter of 2021. The total debt balance is now $812 billion higher than at the end of 2019. The 2.1% increase in aggregate balances was the largest seen since Q4 2013 and marked the largest nominal increase in debt balances since Q2 2007. 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—rose by $282 billion and stood at $10.44 trillion at the end of June. Credit card balances started to tick back up, increasing by $17 billion in the second quarter. Despite the increase, credit card balances were still $140 billion lower than they had been at the end of 2019. Auto loans increased by $33 billion, while student loan balances decreased by $14 billion. In total, non-housing balances (including credit card, auto loan, student loan, and other debts) grew by $44 billion, with increases in auto loans and credit card balances offsetting the decline in student loan balances.
New extensions of installment credit hit series highs in Q2 2021 for both mortgages and auto loans. Mortgage originations, which include mortgage refinances, reached $1.2 trillion, surpassing the volumes seen in the preceding three quarters. In the last four quarters, mortgage originations reached a historic high with nearly $4.6 trillion in mortgages originated. Auto loan originations, which include both loans and leases, reached $202 billion.
"We have seen a very robust pace of originations over the last four quarters with new extensions of credit for mortgages and auto loans combined with rebounding demand for credit card borrowing," said Joelle Scally, Administrator of the Center for Microeconomic Data at the New York Fed. "However, there are still two million borrowers in mortgage forbearance who are vulnerable to financial distress once the forbearance programs come to an end."
Aggregate delinquency rates across all debt products continued to decline since the beginning of the pandemic recession, reflecting an uptake in forbearances provided by both the CARES Act and voluntarily offered by lenders. These supportive policy measures continue to be visible in the delinquency transition rates, as the share of mortgages that transitioned to delinquency hit a record low of 0.4%. The share of mortgage balances 90+ days past due fell to a historic low of 0.5% as forbearance remains an option and foreclosures are mostly on hold. As of late June, the share of outstanding debt that was in some stage of delinquency was 2.0 percentage points lower than the fourth quarter of 2019, just before the COVID pandemic hit the United States.
The share of student loans that are reported as delinquent remains very low as the majority of outstanding federal student loans remain 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 the continued declines in the forbearance rate with a focus on variation by state.
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 $1.22 trillion in newly originated mortgage debt in Q2 2021, with 71% of it originated to borrowers with credit scores over 760.
- About 8,100 individuals had a new foreclosure notation added to their credit reports between April 1 and June 30, by far the lowest number of foreclosures seen since the beginning of the data series in 1999, with foreclosures effectively on legal hold due to CARES Act and other restrictions.
- The share of mortgage balances 90+ days past due fell to 0.5%, a historic low as forbearance remains an option and foreclosures are mostly on hold.
Student Loans
- Outstanding student loan debt stood at $1.57 trillion in the second quarter, a $14 billion drop from Q1 2021.
- About 5.7% of aggregate student debt was 90+ days delinquent or in default in Q2 2021. The lower level of student debt delinquency reflects a Department of Education decision to report current status on loans eligible for CARES Act forbearances.
Account Closings, Credit Inquiries and Collection Accounts
- The number of credit inquiries within the past six months – an indicator of consumer credit demand – increased to $121 million, a 3.7% increase from the previous quarter, after having declined since the second quarter of 2020.
- 206 million new accounts were opened in the second quarter, a jump after subdued account openings since the pandemic hit.
Household Debt and Credit Developments as of Q2 2021
| Category | Quarterly Change * (Billions $) | Annual Change** (Billions $) |
Total As Of Q2 2021 (Trillions $) |
| Mortgage Debt | (+) $282 | (+) $666 | $10.44 |
| Home Equity Line Of Credit | (-) $13 | (-) $53 | $0.32 |
| Student Debt | (-) $14 | (+) $33 | $1.57 |
| Auto Debt | (+) $33 | (+) $72 | $1.42 |
| Credit Card Debt | (+) $17 | (-) $30 | $0.79 |
| Other | (+) $8 | $3 | $0.42 |
| Total Debt | (+) $313 | (+) $691 | $14.96 |
*Change from Q1 2021 to Q2 2021
** Change from Q2 2020 to Q2 2021
Flow into Serious Delinquency (90 days or more delinquent)
| Category | Q2 2020 | Q2 2021 |
| Mortgage Debt | 1.1% | 0.3% |
| Home Equity Line Of Credit | 0.8% | 0.4% |
| Student Loan Debt | 6.5% | 1.0% |
| Auto Loan Debt | 2.3% | 1.6% |
| Credit Card Debt | 5.1% | 3.4% |
| Other | 4.6% | 2.9% |
| ALL | 2.1% | 0.8% |
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 Debt and Credit Report web page and the full report is available for download.
