Press Release
Auto Loan Balances Increase for Ninth Straight Quarter, New York Fed Report Shows
August 14, 2013

In its latest Household Debt and Credit Report, the Federal Reserve Bank of New York announced that outstanding household debt declined by $78 billion from the previous quarter, due in large part to a decline in housing-related debt. Total auto loan balances increased $20 billion from the previous quarter, the ninth consecutive quarterly increase and the largest quarter over quarter increase since 2006. The Quarterly Report is based on data from the New York Fed’s Consumer Credit Panel, a nationally representative sample drawn from anonymized Equifax credit data.

In the last nine quarters, auto loan debt has grown $108 billion and the total eclipsed the $800 billion dollar mark for the first time in nearly five years (Q3 2008). Auto loan originations increased $14 billion in the second quarter to $92 billion, the highest level since Q3 2007. Moreover, the percent of auto loan balances 90+ days delinquent fell to 3.6 percent in Q2 2013, the lowest level in five years. 

A new blog post accompanying the report provides a deeper look into the auto loan debt picture, including information about originations by credit score and age group. 

In Q2 2013 total household indebtedness fell to $11.15 trillion; 0.7 percent lower than the previous quarter and 12 percent below the peak of $12.68 trillion in Q3 2008.  Mortgages, the largest component of household debt, fell $91 billion from the first quarter.1    

“Although overall debt declined in the second quarter, households did increase non-housing debt, led by rising auto loan balances,” said Andrew Haughwout, vice president and research economist at the New York Fed.  “Furthermore, households improved their overall delinquency rates for the seventh straight quarter, an encouraging sign going forward.” 

The percent of 90+ day delinquent balance for all household debt declined to 5.7 percent from 6.1 percent in Q1.  Additionally, the delinquency rate for every individual component of household debt declined from the first quarter: mortgages (4.9 percent from 5.4 percent), HELOC (3 percent from 3.2 percent), credit card debt (10 percent from 10.2 percent) and student loan debt2 (10.9 percent from 11.2 percent).    

Other highlights from the report include:

  • Outstanding student loan debt increased $8 billion to $994 billion.
  • Credit card balances increased $8 billion to $668 billion.
  • Total mortgage debt decreased to $7.84 trillion from $7.93 trillion.   
  • HELOC balances fell $12 billion to $540 billion. 
  • Mortgage originations rose to $589 billion, the seventh consecutive quarterly increase.
  • 200,000 individuals had new foreclosure notations added to their credit reports, the first increase since Q1 2012 but still 65 percent below the peak in Q2 2009. 

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. 

Media Contacts:
Matthew Ward
(212) 720-6885
matthew.ward@ny.frb.org

Andrea Priest
(212) 720-6139
andrea.priest@ny.frb.org

1The fall was in part due to reporting gaps associated with the servicing transfer of a higher-than-usual number of loans.

2As explained in a recent report, delinquency rates for student loans are likely to understate actual delinquency rates because almost 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.