The Federal Reserve Bank of New York recently released its Quarterly Report on Household Debt and Credit which reported that overall delinquency rates improved and continued the trend that has taken place since 2010, according to an announcement from the New York Fed.
“Today’s report highlights a positive ongoing trend in household debt,” said Donghoon Lee, Research Officer at the New York Fed. “Delinquency rates continue to improve, even as credit has become more widely available.”
The New York Fed reports that the second quarter, 4.8 percent of outstanding debt was in some stage of delinquency. This is a 5 percent decrease from the previous quarter, as well as a 5.6 percent decrease in the second quarter of 2015. Additionally, there were 82,000 consumers with new foreclosure notations on their credit reports. This was another low in the 18-year history of this data set.
New York Fed also shows that mortgage delinquencies continued to improve as has been the trend for the past 5 years. The report also says 1.8 percent of mortgage balances were 90 days delinquent at the end of 2016 Q2. This is compared to 2.1 percent in the previous quarter.
Delinquency transition rates for current mortgage accounts were unchanged, with 0.9 percent of current balances transitioning to delinquency. Of mortgages in early delinquency, 16.1 percent transitioned to 90 plus days delinquent, while 36.9 percent became current.
Additionally, it was reported that approximately 224,000 consumers had a bankruptcy notation added to their credit reports in 2016 Q2. This was a 15 percent decrease than in the same quarter last year.
Finally, the report stated that aggregate household debt balances grew slowly in the second quarter of 2016. It was also reported that as of June 30, 2016, total household indebtedness was $12.29 trillion. This debt was a $35 billion, or 0.3 percent, increase from the first quarter of 2016. Overall household debt also reportedly remains 3.1 percent below its 2008 Q3 peak of $12.68 trillion, but is now 10.2 percent above the 2013 Q2 trough.