NY Fed finds troubled debt levels ticked up in third quarter
SPY•The share of US loans in some form of trouble rose 0.3 percentage point to 5% in the third quarter, while total household debt increased $334 billion to $19.1 trillion. The NY Fed said housing credit quality remained strong.
1. Troubled debt rises
The share of loans in some form of trouble reached 5% in the third quarter, up 0.3 percentage point from the second quarter, the New York Fed said. The level was consistent with conditions before the COVID-19 pandemic and below those seen during the financial crisis. Early delinquency transitions rose for mortgages and auto loans, while serious delinquency transitions improved for credit cards and student loans.
2. Household debt grows
Total household debt increased 1.8%, or $334 billion, to $19.1 trillion. Mortgage debt rose $257 billion to $13.4 trillion, credit card borrowing increased $22 billion to $1.3 trillion, and auto loans climbed $21 billion to $1.7 trillion. Student loans more than 90 days past due represented 10.9% of the sector’s borrowing, up from 10.6% in the second quarter.
