The New York Fed’s Quarterly Report on Household Debt and Credit for the September quarter of 2014 showed that mortgage originations, or the number of times new mortgage balances, including refinances, had appeared on consumer credit reports, had increased to $337 billion in the July to September frame. This marked the first time since 2013 that originations had gone up, though quarter three 2014’s figures are still historically low.
Also rising in the September ending quarter was mortgage debt, as the amount of home loan debt incurred by households rose by $35 billion from the June quarter to the September frame. This boosted the total amount of mortgage debt to $8.13 trillion, or $234 billion more debt compared to the September 2013 quarter.
Home equity line of credit (HELOC) balances were down in quarter three, slipping by 1.7 percent, or $9 billion, to a total of $512 billion. And on a positive note, foreclosure statistics were down on the NY Fed report, even as about 113,000 consumers had foreclosure actions making first appearances on their credit report in quarter three.
The New York Fed observed that new foreclosures have been on a downward trajectory since the second quarter of 2009, and are actually at their lowest level since the first time the bank had started tracking this statistic. The percentage of customers delinquent on their mortgages by 90 days or more was also down, slipping from 3.4 percent in quarter two 2014 to 3.2 percent in quarter three.
Household debt in general had increased by $78 billion in the September quarter, boosting the total amount of America’s debt to $11.71 trillion. This represents a $430 billion increase in total household debt on a year-over-year basis, but also suggests that household debt is not as bad as it was during the early part of the worldwide economic recession. In the third, or September ending quarter of 2008, household debt had reached a record high of $12.68 trillion, or 7.6 percent more debt than the last quarter’s figures.
According to the New York Fed, consumers are now more confident about borrowing, following a period of trepidation that resulted from the Great Recession. “Outstanding household debt, led by increases in auto loans, student loans and credit card balances, has steadily trended upward in recent quarters,” observed New York Fed senior vice president and economist Wilbert van der Klaauw. “In light of these data, it appears that the deleveraging period has come to an end and households are borrowing more.”
Talking about other types of debt aside from mortgage debt and HELOCs, the New York Fed’s data revealed that student loan debt increased another $8 billion to $1.13 trillion. Auto loan debt also went up, rising by $29 billion in quarter three to a total of $934 billion. Lastly, credit card debt was up $11 billion in the most recent quarter, increasing to a total of $680 billion.