Household debt rose by 0.6% in the third quarter of 2020, rising by $87 billion to land at $14.35 trillion, the Federal Reserve Bank of New York reported today. The increase more than offset the second quarter decline of 0.2% that was the first decrease since 2014 and the largest drop since 2013.
Mortgage balances, the largest component of household debt, rose by $85 billion in the third quarter, landing at $9.86 trillion. Among non-mortgage debt categories, credit card balances declined by $10 billion, following a $76 billion decline in the second quarter, the steepest drop on record as households payed down existing credit card debt. Auto loans rose by $17 billion and student loans rose by $9 billion.
Overall delinquency rates declined 0.2 percentage point during the third quarter, with 3.4% of outstanding debt in some stage of delinquency. Mortgage delinquencies declined slightly, with 0.96% of mortgage balances 90 days or more delinquent.
For auto loans and credit card debt, the flow into serious delinquency declined, landing at 2.09% for auto loans and 4.73% for credit card debt. Student loan delinquency rates declined to 4.36% from 9.26% the prior quarter as they are covered by CARES Act forbearances. Read more.
