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U.S. households took on debt at a faster clip in the fourth quarter than at any time in seven years, but credit quality measures continued to improve, according to economic reports issued Tuesday by the Federal Reserve Bank of New York and other sources.
February 18 -
Capital One Financial (COF) keeps waiting for its U.S. credit-card holders to become comfortable with a bit more debt. It's been a long delay, and one that will likely continue well into 2014.
January 17
For the first time in more than three years, the total balance of new mortgage originations is larger than that of loans in foreclosure, according to Equifax.
First-time homebuyer transactions and move-up buyer purchases by homeowners who increased their existing mortgage debt, "have finally overtaken foreclosures and accelerated pay-downs, resulting in increases home finance balances," explained Amy Crews Cutts, Equifax chief economist in a press release.
The Equifax National Consumer Credit Trends Report for January also showed gains in balances of both bank- and retail-issued credit cards. Meanwhile, the total balance of home finance writeoffs in 2013 dropped to $149.7 billion, a six-year low and a more than 30% decrease compared to 2012.
"American consumers have shed more than $1.5 trillion in mortgage debt since the start of the financial crisis and only now seem interested in investing in housing again," said Crews Cutts.
In January 2014 first mortgage balances increased 2.5% from a year earlier, to $7.9 trillion, the largest year-over-year increase in more than 36 months. Total home equity balances fell more than 6%, to $622.3 billion, during the same period while the number of first mortgages that were 30 days or more delinquent or in foreclosure decreased 22.8%. Home equity installment delinquencies and home equity revolving delinquencies, decreased by 22% and 10.6%, respectively.
After years of shedding credit card debt, consumers appear willing to carry balances again as total outstanding balances of bank and retail-issued cards continued to increase for three months in a row.
The total number of card loans outstanding reached more than 315 million in January, the highest since October 2009. New bank card credit originated January through November 2013 was $184.4 million, a five-year high and up 12.5% from the same time a year ago. At 39.6 million, the total number of new card accounts issued during that same time, also marked a five-year high and an increase of 9.5% compared to the previous year, while writeoffs on bank card accounts decreased 14.4%.
