Americans are increasingly difficult to manage a growing debt of debt, and in some cases they were not so overloaded since the great recession.
The Bank of Federal Reserve New York announced its latest comprehensive overview of credit conditions for American households in major categories such as mortgages, car loans, credit cards for ownership capital and student loans.
In the fourth quarter of last year, the total debt levels increased by 0.5% to $ 18.04 million, according to the Quarterly Report on the Legal and Population Loans, CNN reports.
All major categories of loans accompanying in the report have also recorded an increase. Credit card balance exceeded 1.2 trillion dollars, which is an increase of 7.3% compared to the fourth quarter of last year and the smallest annual increase of 2021.
The higher level of households can be expected because data may reflect the factors such as population growth, strong economic conditions, consumption related to holidays and e-commerce.
In addition, prices are significantly more because inflation is in growth for almost four years.
However, the Thursday report also showed that Americans seem to have more difficulties in solving that debt – especially for car loans and credit cards.
The share of households that seriously late (missed payment more than 90 days) for their car loans and credit cards is at the highest level in 14 years, investor me.
Increasing the percentage of loans that pass into serious delinquency is partially reflecting loans with a higher balance that are the result of a significant price of the car after pandemic and related disorders in the supply chain, the researchers of the New York Fed have noticed.
“News on delay in car loans are worrisome,” said Met Šulc on Thursday, the main credit analyst in LendingTree. “Many Americans just have to have a car to get to work, so it’s often one of the greatest priorities when paying your account. If they struggle to make those payments, it could be a sign of fighting to pay others. “
That seems to be the case with credit cards. Last month, Federal Filadelphia Reserves reported that the share of credit cards on which people paid only the minimum payment climbed to 12-year-old maximum during the third quarter of 2024.
Thursday’s report, which followed the activities in the fourth quarter, showed that the transition to the wound and serious delinquency of credit cards remain elevated.
In addition, borrowers take an increasing share of available loans. During the fourth quarter, the total credit card utilization rate increased to 23.8% for the first time since 2013. year, the analysis of the New York FED data.
These balance sheets also grow in an expensive debt environment: interest is still high.
However, the overall delinquency rates remain below what was seen before the pandemic. During the fourth trimester, they, according to the report, typed up to 3.6% of the outstanding debt at a stage of delays.
While the balance of debt is growing, it is worth noting that the income is on the rise, which helped households to manage their debt. In addition to the data of the New York Fed, economists carefully monitor the disclosed measure of federal reserves – the ratio of household debt servicing, which accompanies debt repayments as a percentage of income after tax.
The latest FED data showed that the ratio continues to grow, but it is still far below the level before the pandemic. From the third quarter 2024. Debt repayments made 11.3% of available income, which is the most starting from the first quarter of 2020. years.
“At the moment, household balance sheets are in a rather decent form, in the sum,” Brett Ryan said, a senior economist Deutsche Bank, in the interview with CNN. “It is obvious that there is a great disparity among groups of revenue, but the first 20% are about 40% of consumer spending.”
And consumer spending, he said, remains solid.
