U.S. Consumer Debt Continues to Decline
U.S. consumer debt fell during July through September, pushed down by declines in mortgage balances, the New York Federal Reserve said on Monday.
The report showed households continuing to shed debt and dig out from losses following the collapse of housing markets and the 2007-2009 recession.
Total consumer credit was 0.6 percent below its second quarter level, the New York Fed said in its quarterly Household Debt and Credit report.
``The decline in outstanding consumer credit reveals that households continue to try and deleverage in the wake of a challenging economic environment and large declines in home values,'' said Andrew Haughwout, an economist in the New York Fed's research and statistics group.
Mortgage balances fell by 1.3 percent during the quarter, partially offsetting gains registered earlier in the year, the New York Fed said.
Household mortgage indebtedness was down 9.6 percent from its peak. Consumer indebtedness excluding mortgages and home equity lines of credit rose about 1.3 percent.
A number of data points pointed to households continuing to struggle with debt.
Total household delinquency rates rose in the quarter, while mortgage originations fell to the lowest level since mid-2000, the regional Fed bank said. The number of mortgages falling into delinquency during the quarter rose, reversing a trend of declines.
One bright spot was that the number of credit account inquiries over six months -- an indicator of consumer credit demand -- continued to rise.
The rise in consumer credit demand is a positive sign for consumer sentiment, Haughwout said.