Zinger Key Points
- U.S. household debt surged by $212 billion, hitting a record $17.5 trillion, led by mortgages and credit cards.
- Delinquency rates rose, with significant increases in credit card and auto loan delinquencies signaling financial stress.
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U.S. household debt climbed by $212 billion, reaching a new record high of $17.5 trillion at the end of 2023, according to the New York Federal Reserve.
The Quarterly Report on Household Debt and Credit revealed significant increases across several categories, with credit card balances and mortgage debts leading the surge.
New York Fed Quarterly Report On Household Debt And Credit: Key Highlights
- Mortgage debt alone climbed by $112 billion to $12.25 trillion.
- Home equity lines of credit (HELOC) balances saw an $11 billion uplift, marking the seventh successive quarter of growth since the first quarter of 2022, bringing the total to $360 billion.
- Credit card balances experienced a robust growth of 4.6%, adding $50 billion to reach $1.13 trillion.
- Auto loans saw a $12 billion increase pushing the total to $1.61 trillion.
- On the other, student loan balances saw only a marginal rise of $2 billion, indicating a somewhat stable trend with a total debt of $1.6 trillion.
- Federal student loan payments missed will not be reported to credit bureaus until the fourth quarter of 2024. Due to these policies, less than 1% of the total student debt was marked as 90+ days delinquent or in default during the fourth quarter of 2023, and this low rate is expected to persist at least until the end of 2024.
- An increase in delinquency rates was reported in almost all types of debt. The overall delinquency rate edged up to 3.1%, with notable increases in the transition into delinquency for credit card and auto loan balances.
- The annualized transition into delinquency reached 8.5% for credit cards and 7.7% for auto loans, raising alarms about the financial stress faced by consumers, especially among younger and lower-income demographics.
- In the fourth quarter of 2023, around 114,000 consumers received a bankruptcy notation on their credit reports, a slight decrease from the preceding quarter. Nearly 4.7% of consumers possess a third-party collection account noted in their credit history.
“Credit card and auto loan transitions into delinquency are still rising above pre-pandemic levels," observed Wilbert van der Klaauw, economic research advisor at the New York Fed.
| CATEGORY | QUARTERLY CHANGE (BILLIONS $) | ANNUAL CHANGE (BILLIONS $) | TOTAL AS OF Q4 2023 (TRILLIONS $) |
|---|---|---|---|
| Mortgage Debt | (+) $112 | (+) $329 | $12.252 |
| Home Equity Line Of Credit | (+) $11 | (+) $24 | $0.360 |
| Student Debt | (+) $2 | (+) $6 | $1.601 |
| Auto Debt | (+) $12 | (+) $55 | $1.607 |
| Credit Card Debt | (+) $50 | (+) $143 | $1.129 |
| Other | (+) $25 | (+) $47 | $0.554 |
| Total Debt | (+) $212 | (+) $604 | $17.503 |
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