Troubled borrowing rose to 5% in the third quarter, up 0.3 percentage points from the prior quarter. Total household debt increased $334 billion, or 1.8%, to $19.1 trillion.
Loans in some form of trouble stood at 5% in the third quarter, up 0.3 percentage points from the second quarter, the New York Fed said. The level was consistent with pre-pandemic conditions and well below that seen during the financial crisis. Early delinquencies increased for mortgages and auto loans, while transitions into serious delinquency improved for credit cards and student loans.
Student loans more than 90 days past due rose to 10.9% of the sector's borrowing from 10.6% in the second quarter. Total household debt grew 1.8%, or $334 billion, to $19.1 trillion. Mortgage debt increased $257 billion to $13.4 trillion, credit card borrowing rose $22 billion to $1.3 trillion, and auto loans grew $21 billion to $1.7 trillion.
New York Fed researchers said some borrower difficulties reflected pandemic-era lending, including eased credit card standards. Donghoon Lee said lower-income borrowers and those with lower credit scores accounted for a growing share of new credit cards during the pandemic, and those accounts were showing higher distress. He said new credit card delinquencies would likely continue to show signs of improvement absent macroeconomic shocks.
