Consumer debt resumes decline in first quarter: NY Fed
May 14 2013
By : Leah Schnur
(Reuters) - Americans resumed cutting back on debt in the first quarter as mortgage and credit card balances fell, while overall delinquency rates improved, data from the New York Federal Reserve showed on Tuesday.
Total consumer debt stood at $11.23 trillion in the first three months of the year, down 1 percent from the fourth quarter, the New York Fed said in its quarterly household debt and credit report.
Household delinquency rates decreased to 8.1 percent from 8.6 percent.
Americans have been shedding debt in the years since the housing collapse and financial crisis, and credit is now well below the peak of $12.68 trillion that was seen in the third quarter of 2008.
Consumers had briefly reversed course as debt levels rose in the final quarter on 2012.
"After a temporary deceleration in the previous quarter, the data suggest that household deleveraging has resumed its previous trajectory," said Wilbert van der Klaauw, senior vice president and economist at the New York Fed.
But Americans continued to take on more student debt with outstanding balances climbing $20 billion to $986 billion. Still, delinquency rates improved with 11.2 percent of loans behind by 90 days or more, down from 11.7 percent.
Outstanding mortgage balances fell by $101 billion to $7.93 trillion, while 1.6 percent of existing mortgages fell into delinquency. Mortgages are the largest segment of consumer debt.
At the same time, lenders made more mortgages with originations rising to $577 billion.
Credit card balances fell by about $19 billion, while the number of open credit card accounts was unchanged at 383 million.
The number of credit account inquiries over six months, an indicator of consumer credit demand, fell to 158 million from 164 million.