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U.S. household debt increased by $212 billion (1.2%) during the fourth quarter of 2023 to reach a total of $17.5 trillion, according to the Federal Reserve Bank of New York’s Center for Microeconomic Data.

Mortgage balances rose by $112 billion from the previous quarter and stood at $12.25 trillion at the end of December. Balances on home equity lines of credit (HELOC) increased by $11 billion, the seventh consecutive quarterly increase after the first quarter of 2022, and is now at $360 billion.

Credit card balances increased by $50 billion to $1.13 trillion while auto loan balances rose by $12 billion to reach a total of $1.61 trillion.

“Credit card and auto loan transitions into delinquency are still rising above pre-pandemic levels,” said Wilbert van der Klaauw, economic research advisor at the New York Fed. “This signals increased financial stress, especially among younger and lower-income households.”

The new data report also found aggregate delinquency rates increased in the fourth quarter, with 3.1% of outstanding debt in some stage of delinquency at the end of December. Delinquency transition rates increased for all debt types, except for student loans. Annualized, approximately 8.5% of credit card balances and 7.7% of auto loans transitioned into delinquency while the delinquency transition rates for mortgages increased by 0.2 percentage points – which the reported noted as still low by historic standards. Serious credit card delinquencies increased across all age groups, most notably with younger borrowers surpassing pre-pandemic levels.

 

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