Deleveraging? Not Quite: Household Debt Quarterly Report

The Fed's household debt quarterly report shows no aggregate deleveraging although mortgage debt is below the 2008 peak.

The Fed's Quarterly Report on Household Debt and Credit show overall debt hit a new high in the fourth quarter of 2017.

The composition of the debt has changed. Mortgage debt is still below the 2008 peak.

Aggregate household debt balances increased in the fourth quarter of 2017, for the 14th consecutive quarter, and are now $473 billion higher than the previous (2008:Q3) peak of $12.68 trillion. As of December 31, 2017, total household indebtedness was $13.15 trillion, a $193 billion (1.5 percent) increase from the third quarter of 2017. Overall household debt is now 17.9 percent above the 2013Q2 trough.

Number of Accounts by Type

The number of auto loan accounts well exceeds the 2008 peak, while the number of mortgage loan accounts is well below the previous peak.

Mortgage Originations by Credit Score

Credit Score Percentiles

Credit scores show how the housing bubble formed. Things are comparatively benign now.

Auto Loan Scores

Auto loan scores have improved since 2008 but they represent a problem area.

Percent of Balance 90 Days or Over Delinquent

Auto loan delinquencies are on the rise. I believe those student loan numbers are massaged.

Total Balance by Delinquency Status

That chart looks as if it's in a bottoming process. Rising interest rates, rising rent, and rising medical expenses will eat up every bit of wage gains.

Mike "Mish" Shedlock

Comments
No. 1-11
hmk
hmk

I believe the debt to income ratio is on the lower end of the scale. This statistic is not included so this debt level is not that relevant. The debt level is not as great as alluded to.

Advancingtime
Advancingtime

Much of this debt is owed by the poor. Inequality has been growing and it is far worse for society and the world than first thought. Sadly, the recently passed Republican tax bill will only add fuel to the fire. Over the years, a great deal of growing corporate profits come from cutting back on the greatest expense businesses have to pay and that is labor. More on this subject in the article below.
http://brucewilds.blogspot.com/2018/01/inequality-is-far-worse-for-society_28.html

Snow_Dog
Snow_Dog

HELOCs no longer eligible as tax deduction?

Sechel
Sechel

looks like we were deleveraging until 2013. the force against deleveraging are too strong. our economy is built on debt. the u.s. auto companies can't exist without it and during the reorg g.m. made sure it kept access to an origination facility. we're already seeing an increase in subprime lending of all types. pay day lending is taking off , so even if auto-subprime is slowing other speculative lending is more than making up the slacck

Rayner-Hilles
Rayner-Hilles

https://fred.stlouisfed.org/series/RELACBQ158SBOG
Not a single recession in history that isn't associated with a decline in real estate loans: real estate loans ARE the boom bust cycles.