All Posts Tagged: student loans

U.S. Outlook: Household debt rises again in the fourth quarter

Scott Anderson
Chief Economist

Aggregate household debt stood at $13.5 trillion in the fourth quarter of 2018 and has now increased for 18 consecutive quarters, according to a recently released quarterly report from the New York Federal Reserve. This is a 0.2% increase from the third quarter and a 3.0% rise from a year ago.

Household debt has now increased on an annual basis for 21 straight quarters after declining for 19 successive quarters from Q1 2009 to Q3 2013. Moreover, household debt is now 21.4% above the Q2 2013 trough of $11.2 trillion.

A young couple going through their financial records in the comfort of their home.

For more on this, see highlights of my report below, followed by a link to the full U.S. Outlook, delivered on Feb. 15.

Key observations:
  • Student loans led the way with a 5.7% year-on-year rise in the fourth quarter, followed by auto loans and credit cards with growth of 4.3%.
  • Mortgage balances increased 2.7%, while balances on home equity lines of credit declined 7.2% and have now been negative compared to a year ago since the first quarter of 2010.
  • An inherent downside risk in extending credit to subprime consumers is a rising delinquency rate as loans mature. The 90-day or more delinquency rate – defined as seriously delinquent – jumped from 1.52% in late 2012 to 2.36% in the fourth quarter of 2018.
  • Real GDP is estimated to have expanded 3.1% Q4/Q4 last year, but is forecast to slow to 1.8% this year and slow further in 2020.

Read my full report.

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Tackling household debt

Beth Hale
Posted by Beth Hale
Consumer Banking
Young, biracial couple looking into a store window, smiling and holding several shopping bags.

It is important to know what type of debt you have and how you can tackle it, especially if you find yourself struggling to manage it.

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How your home’s equity may help in financing college costs

Stew Larsen
Posted by Stew Larsen
Mortgage Banking
View from behind as male college student wearing backpack walks up a road toward campus.

As with any credit product, one of the keys to unlocking the benefits of equity in real estate is understanding the loan product.

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Is student debt locking out homebuyers?

Chad Royle
Posted by Chad Royle
Mortgage Banking
Young interracial couple talking with older couple (parents?) outside a house on a sunny day.

The rise in student loan debt in recent years has raised concerns that college graduates are being squeezed out of the housing market.

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U.S. Outlook: Consumer credit spigot remains open

Scott Anderson
Chief Economist
Graph showing the dramatic rise in student loan debt in last 15 years

Solid gains in consumer credit growth are an integral part of our sanguine outlook for near-term consumer spending.

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