The bank report, part of its survey of household debt and credit conditions, showed that overall debt levels rose by $109 billion, or 0.6%, in the second...
- Total U.S. household debt levels edged up in the second quarter but overall delinquency rates stabilized, indicating that borrowers are still in decent enough shape to support the economy, a report from the Federal Reserve Bank of New York said on Tuesday.
The data arrives at an uncertain time for the economy. The Federal Reserve raised its benchmark interest rate to 5.25-5.50% from near zero between March 2022 and July last year, where it remains, in order to quash high inflation. Borrowing costs overall jumped in lockstep but the economy remained resilient amid a high savings rate.Worse-than-expected job market data last week, however, have made financial markets nervous that the economy may be on the cusp of a downturn.
Delinquency transition rates for mortgages also rose slightly but early delinquency rates for mortgage accounts remained low by historical standards, the report noted.Mortgage balances were up by $77 billion to $12.52 trillion, while auto loan levels increased by $10 billion and overall credit card borrowing outstandings rose by $27 billion by the end of the quarter, to $1.14 trillion. Credit card balances during the quarter were 5.8% above the level they stood at a year ago.
Of the roughly 1.8 million HELOCs originated since 2023, about 57% percent have gone to borrowers aged 50 or over, with about 24% going to those in their 40s. They are overwhelmingly only available to those with high credit scores.
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