Upsurge In Car Lending Sends Total Auto Debt Above $1 Trillion For First Time

by Shelton on September 30th, 2015

filed under Car Lending

The Federal Reserve Bank of New York released its Household Debt and Credit Report this month.
 The report, which uses anonymous credit data to generate a
nationally representative sample, found that consumers#39; overall
indebtedness increased $2 billion to $11.9 trillion in the second
quarter of 2015.

This number was aided by the increased number of Americans
buying cars which pushed auto loan debt above $1 trillion for the
first time in US history.  According to the report,
Americans took out $119 billion in auto loans from April through
June, up from $95 billion in the first quarter of the year.
 Through the first half of the year, auto sales are on pace to
challenge the record of $17.4 million set in 2000.

Outstanding mortgage debt dropped by 0.7 percent
in the second quarter to $8.12 trillion.  Mortgage debt
declined by $55 billion quarterly, while total household
indebtedness increased just $2 billion from Q1 2015 up to $11.85
trillion in Q2.  Foreclosures hit their lowest point in the
16-year history of the bank#39;s Consumer Credit Panel, with
95,000 new foreclosures in the second quarter – down from
112,000 at the same time last year.

The report found that mortgage balances and HELOC dropped by $55
billion and $11 billion, respectively.  In the second quarter,
there were $466 billion in new mortgage originations, and almost
half of those originations were driven by borrowers with credit
scores over 780.  Only 8 percent ($38 billion) of all new
mortgages were originated by borrowers with credit scores 660 and
below.

Finally, credit card balances increased by $19 billion, while
student loan balances – which totaled $1.2 trillion in June
– remained flat.  However, although student loans make
up only 10% of all consumer debt, the amount of seriously past due
student loan payments total nearly one-third of all seriously
past-due debt payments.

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