by Calculated Risk on 5/15/2023 11:12:00 AM

From the NY Fed: Total Household Debt Reaches $17.05 trillion in Q1 2023; Mortgage Loan Growth Slows

The Federal Reserve Bank of New York's Center for Microeconomic Data today issued its Quarterly Report on Household Debt and Credit. The Report shows an increase in total household debt in the first quarter of 2023, increasing by $148 billion (0.9%) to $17.05 trillion. Balances now stand $2.9 trillion higher than at the end of 2019, before the pandemic recession. The report is based on data from the New York Fed's nationally representative Consumer Credit Panel.

Mortgage balances rose modestly by $121 billion in the first quarter of 2023 and stood at $12.04 trillion at the end of March. Credit card balances were flat in the first quarter, at $986 billion. Auto loan balances increased by $10 billion in the first quarter, bucking the typical trend of balance declines in first quarters. Student loan balances slightly increased and now stand at $1.60 trillion. Other balances, which include retail cards and other consumer loans, increased by $5 billion. In total, non-housing balances grew by $24 billion.

Mortgage originations, which include refinances, dropped sharply in the first quarter of 2023 to $324 billion, the lowest level seen since 2014. The volume of newly originated auto loans was $162 billion, a reduction from pandemic-era highs but still elevated compared to pre-Covid volumes. Aggregate limits on credit card accounts increased by $119 billion, representing a 2.7% increase from Q4 2022 levels. Limits on home equity lines of credit were up by $9 billion in the first quarter.

The share of current debt becoming delinquent increased for most debt types. The delinquency transition rate for credit cards and auto loans increased by 0.6 and 0.2 percentage points, respectively approaching or surpassing their pre-pandemic levels.
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Click on graph for larger image.

Here are three graphs from the report:

The first graph shows aggregate consumer debt increased in Q1.  Household debt previously peaked in 2008 and bottomed in Q3 2013. Unlike following the great recession, there wasn't a decline in debt during the pandemic.

From the NY Fed:

Aggregate household debt balances increased by $148 billion in the first quarter of 2023, a 0.9% rise from 2022Q4. Balances now stand at $17.05 trillion and have increased by $2.9 trillion since the end of 2019, just before the pandemic recession.

The second graph shows the percent of debt in delinquency.

The overall delinquency rate increased slightly in Q1.  From the NY Fed:

Aggregate delinquency rates were roughly flat in the first quarter of 2023 and remained low, after declining sharply through the beginning of the pandemic. As of March, 2.6% of outstanding debt was in some stage of delinquency, 2.1 percentage points lower than last quarter of 2019, just before the COVID-19 pandemic hit the United States.

The third graph shows Mortgage Originations by Credit Score.

From the NY Fed:

Mortgage originations measured as appearances of new mortgages on consumer credit reports, dropped sharply in the first quarter of 2023 to $324 billion, the lowest seen since 2014Q2, a quarter that was unusually low due to the “taper tantrum”. ... Limits on home equity lines of credit (HELOC) were up by $9 billion, or a 1% increase. ... The median credit score for newly originated mortgages decreased slightly to 765.

There is much more in the report.