U.S. Households Borrow at Fastest Pace of Expansion, Fed Says

  • Total consumer debt rose 4.5 percent in year through June 2017
  • Acceleration in mortgage, credit-card borrowing fuel increase

American households increased their borrowing over the past year at the fastest pace of the U.S. economic expansion, according to the Federal Reserve Bank of New York.

Consumer debt levels rose 4.5 percent in the year through June to $12.84 trillion, data published Tuesday by the New York Fed showed. Mortgage borrowings were up 3.9 percent, while credit-card balances increased 7.5 percent. Both marked the fastest rate of increase since 2008. Auto- and student-loan debt levels also rose.

The percentage of balances that became 30 or more days delinquent in the second quarter of 2017 ticked up for each of the four debt categories. Credit-card debt saw the largest percentage increase in transitions to delinquency -- to 6.2 percent, from 5.1 percent a year earlier.

“While relatively low, credit-card delinquency flows climbed notably over the past year,” Andrew Haughwout, a senior vice president at the New York Fed, said in a press release.

“This is occurring within the context of loosening lending standards, as borrowers with lower credit scores recover their ability to access credit cards,” he said. “The current state of credit card delinquency flows can be an early indicator of future trends and we will closely monitor the degree to which this uptick is predictive of further consumer distress.”

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