Americans' household debt is at its highest level ever, but U.S. household net worth has also hit an all-time high, recent reports from the Federal Reserve System show.
At the end of the third quarter, household debt totaled $13.51 trillion, the Center for Microeconomic Data at the Federal Reserve Bank of New York reported last month. That figure represented a rise of $219 billion, or 1.6 percent, from the second quarter. It was the 17th straight quarter that household debt balances rose, according to the quarterly report from the New York Fed Consumer Credit Panel.
Per Capita Debt in the Southeast
This chart shows the average debt of each person in the Atlanta Fed's district who has an Equifax credit report. The composition of this balance includes mortgages, home equity revolving debt, auto loans, credit cards, student loans, and other debt. Currently, average debt balance is highest in Georgia and Florida and lowest in Mississippi.
Mortgage balances on consumer credit reports were $9.1 trillion at the end of the third quarter, up $141 billion from the second quarter. Home equity line of credit balances fell by $10 billion to $422 billion, the lowest level in 14 years. Accounts unrelated to housing increased $88 billion in the third quarter, with car loan, credit card, and student loan balances all climbing.
Car Loans in the Southeast
This chart represents the value of newly opened automobile loans, including leases, for the Atlanta Fed's district. The value of these loans for both new and used vehicles is greatest in Florida and Georgia. Nationwide, $158 billion in new auto loans were made in the third quarter, the highest level since 2004.
Those increases are not necessarily cause for alarm. In November, the Federal Reserve Board of Governors noted in its first Financial Stability Report that household borrowing was at a "low-to-moderate level relative to incomes." Growth in total household credit (including mortgages, credit cards, and student and automobile loans) during the year that ended in the second quarter of 2018 was lower than the average annual rise in such credit from 1997 through the first half of 2018, the report stated.
Nationwide, delinquency rates worsened, the New York Fed report noted. As of September 30, 2018, 4.7 percent of outstanding debt was in some stage of late payment, the largest in seven years. That compared with U.S. delinquency of 4.5 percent in the second quarter.
Delinquency Rates in the Southeast
This chart shows the share of balances that were delinquent 90 days or more for each state. Florida delinquencies show a noticeable rise between 2007 and 2015 but now stand among the lowest of the six states in the Atlanta Fed's district. Currently, rates for payments late 90 days or more are highest in Mississippi and lowest in Tennessee. Georgia had a noticeable uptick in 90-day delinquencies between 2009 and 2013.
Meanwhile, the Federal Reserve Flow of Funds report in early December showed that household net worth—defined as the difference between total assets and liabilities of households and nonprofit organizations—stood at $109.04 trillion in the third quarter, a rise of $2.07 trillion, or 1.9 percent, from the second quarter.
Karen Jacobs
Staff writer for Economy Matters