Mortgage debt has increased to $9.44 trillion according to the latest Quarterly Report on Household Debt and Credit from the New York Federal Reserve. Household debt in total increased by $92 billion (0.7%) to $13.95 trillion in Q3 2019. This is the 21st consecutive quarter with an increase, and the total is now $1.3 trillion higher, in nominal terms, than the previous peak of $12.68 trillion in the third quarter of 2008.
Mortgage balances—the largest component of household debt—rose by $31 billion in the third quarter to $9.44 trillion. Balances on home equity lines of credit (HELOC), which have been declining since 2009, fell by $3 billion this quarter, bringing the aggregate outstanding balance to $396 billion.
“New credit extensions were strong in the third quarter of 2019, with auto loan originations reaching near-record highs and mortgage originations increasing significantly year-over-year,” said Donghoon Lee, research officer at the New York Fed. “The data suggest that households are taking advantage of a low-interest rate environment to secure credit.”
Credit standards tightened slightly in the third quarter of 2019, with the median credit score of newly originating mortgage borrowers rising to 765, a 6-point increase from the previous quarter.
The New York Fed also notes that flows into delinquency among mortgage loans were mostly unchanged from the previous quarter, and foreclosures remain very low by historical standards. Approximately 65,000 individuals had a new foreclosure notation added to their credit reports between July 1- September 30, 2019. As of June 2018, CoreLogic notes that the national share of mortgages that were in some stage of delinquency was 4% in June 2019—a 0.3 percentage point decline, compared to last year’s 4.3%.
The share of mortgages that are delinquent more than 90 days fell from 1.2% to 0.9%, and the percentage of mortgages that were more than 120 days delinquent dropped to 1% from 1.4% in June 2018.