U.S. household debt will further increase in 2023, and the overall debt delinquency rate will increase significantly, among which credit card debt delinquency has surged, which is the hardest hit area. The impact of high interest rates in the United States on many consumer debts is quite significant.
The New York Fed said on Tuesday that U.S. household debt increased to 17 in 2023$503 trillion. In the fourth quarter of last year, household debt increased by $212 billion quarter-on-quarter, an increase of 12%, a year-on-year increase of 36%。Where:
The total amount of credit card debt reached 1At $13 trillion, such debt jumped 14 percent from the same period in 20225%。However, credit card debt-to-income ratios remain below pre-pandemic levels. Auto debt increased to 1$61 trillion, a quarterly increase of $12 billion, and an annual increase of $55 billion, an increase of 35%。Student loan-type debt barely increased during the pandemic and now totals just over 1$6 trillion, which is little change from the third quarter of last year and only 04%。The ratio of student loan debt to total debt is about 915%。U.S.** Biden has forgiven about $136.6 billion in student loan debt since taking office. In 2023, the debt of housing mortgage loans will increase by 28%。In 2023, debt that has turned into "severely delinquent" has increased in many categories, but the most serious of these is credit card debt. "Serious default" means a debt that is 90 days or more past due. Overall,The proportion of "seriously delinquent" debts is 142%, significantly higher than just over 1% at the end of 2022.
By category:
The severe delinquency rate for credit card debt reached 64%, up 59% from just over 4% at the end of 2022. On an annualized basis, the New York Fed researchers said the quarterly growth rate was about 85%。Delinquencies on home mortgages, car loans and other types of debt have also risen. In 2023, the delinquency rate of residential mortgage debt will increase to 082%, up 025 percentage points. The delinquency rate for student loans declined, with the proportion of severely delinquent debt falling slightly to 08%。Delinquency rates for Home Equity Credit (HELOC) have also decreased. Wilbert van der Klaauw, an economic research adviser at the New York Fed, said total debt is rising, roughly at the same pace as it was before the pandemic began. However, delinquencies on credit card and auto loans are still rising, surpassing pre-pandemic levels. This indicates increased financial pressure on people, especially young and low-income families.
U.S. borrowers have been hit by higher interest rates in the country. During the Fed's rate hike cycle from March 2022 to July 2023, the short-term borrowing rate increased by a cumulative 525 percentage points, bringing the federal ** interest rate to its highest level in about 23 years. This benchmark rate applies to most consumer debt with a variable rate. Fed researchers believe that rising interest rates may have had an impact on delinquency rates.
In the case of cars, for example, due to interest rate hikes, the number of payments has barely changed even though cars** have fallen. Taking credit card debt in the hardest-hit area as an example, since the Federal Reserve began its interest rate hike cycle, the interest rate on credit cards has increased from about 145% jumped to 215%。
Wall Street news, welcome **app to see more.