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What’s ‘Driving’ Household Debt?

Third Quarter 2017, Vol. 6, Issue 3

Preston Ash, Lexie Ford and Thomas F. Siems

Around the time of the Great Recession, total household debt peaked at $12.7 trillion, and now, nearly a decade later, it has reached a new high of $12.8 trillion. Since the number of households has increased and incomes are much higher today, the overall debt burden and servicing of this debt is not nearly the problem it was then. But how has the composition and volume of household debt changed since the Great Recession? And are there any troublesome lending areas as households resume borrowing?
This article investigates these questions and looks deeper into automobile debt and delinquencies for both the U.S. and the Eleventh Federal Reserve District by analyzing data from the New York Fed Consumer Credit Panel/Equifax. Since the Great Recession, auto debt has been one of the key drivers of overall household debt, and there is evidence that delinquencies on subprime auto loans are worsening nationally and in the three states included in the Eleventh District.

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