Americans’ non-mortgage interest payments — such as for credit cards and auto loans — as a share of their disposable income was 2.4% in April, near the highest levels since 2008, according to Quinlan’s analysis of Commerce Department data.
— unusual_whales (@unusual_whales) July 10, 2024
According to the Federal Reserve Bank of New York, U.S. household debt has indeed reached a record level. Here are the key points from their latest Quarterly Report on Household Debt and Credit (Q1 2024):
- Total Household Debt: In the first quarter of 2024, total household debt rose by $184 billion, reaching a staggering $17.69 trillion. This includes various types of debt such as mortgages, auto loans, and credit card balances.
- Mortgage Balances: Mortgage balances increased by $190 billion, bringing the total to $12.44 trillion. This reflects ongoing activity in the housing market.
- Auto Loans: Balances on auto loans climbed by $9 billion, reaching $1.62 trillion. Auto loan balances have been on an upward trajectory since 2020.
- Credit Card Balances: Credit card balances declined by $14 billion during the first quarter, typical for this period. However, credit card debt remains substantial at $1.12 trillion.
- Delinquency Rates: Nearly 9% of credit card balances and 8% of auto loans transitioned into delinquency (annualized). This indicates that more borrowers are falling behind on payments.
- HELOC Balances: Home equity lines of credit (HELOC) increased by $16 billion, continuing a trend seen since 2022Q1. The aggregate outstanding balances now stand at $376 billion.
- Other Balances: Balances on retail cards and other consumer loans decreased by $11 billion.
- Student Loans: Student loan balances remained effectively flat, with a $6 billion decrease, totaling $1.6 trillion.
While mortgage and auto loan balances continue to rise, credit card balances have declined slightly. However, the increase in delinquency rates suggests that some borrowers are facing financial challenges.
U.S. household debt has reached a record and more Americans are falling behind on their credit card payments, according to data from the New York Fed.
— unusual_whales (@unusual_whales) July 10, 2024
Sources:
www.businesstimes.com.sg/international/us-consumer-borrowing-rises-most-three-months-credit-cards
www.msn.com/en-us/money/other/pandemic-piggy-banks-run-dry-us-economy-braces-for-impact/ar-BB1p0UHZ