Slower Gains for Consumer Credit

2024-06-11T11:16:26-05:00

Total outstanding US debt stood at $5.05 trillion for the first quarter of 2024, increasing at an annualized rate of 1.86% (SA), according to the Federal Reserve’s G.19 Consumer Credit Report. From the first quarter of 2023 to the first quarter of 2024, the total increased by 2.09%. This is lower than the 6.67% year-over-year (YoY) rise from Q1 2022 to Q1 2023, and the 6.51% YoY rise from Q1 2021 to Q1 2022. Nonrevolving and Revolving Debt Of the total outstanding US debt in the first quarter of 2024, the nonrevolving share is 73.47%, with revolving at 26.53%. Nonrevolving debt, primarily made up of student and auto loans, stands at $3.71 trillion (SA) for the first quarter of 2024. Revolving debt, which is primarily made up by credit card debt, stands at $1.34 trillion. Both nonrevolving and revolving debt have slowed since households’ pandemic-era savings have dwindled. In terms of YoY growth, both nonrevolving and revolving debt peaked in the fourth quarter of 2022 at 15.10% and 5.34% respectively. In the first quarter of 2024, the YoY growth rate for nonrevolving debt decreased to 7.93%, with revolving debt falling to 0.13%. Both experienced their fifth consecutive quarterly decline in YoY growth.­ Student and Auto Loans Breaking down the components of nonrevolving debt, student loans account for 47.24%, and auto loans make up 41.88% (the G.19 report excludes real estate loans). The collective other loans make up the remaining 10.87% of nonrevolving debt.   Student loans in the first quarter of 2024 totaled $1.75 trillion (non-seasonally adjusted), marking the third consecutive decrease of 1.31% over the year, following an annual decrease of 1.97% in the previous quarter. The third quarter of 2023 marked the first YoY decrease for student loan debt since the data was first reported. Auto loans for the first quarter of 2024 were at $1.55 trillion (NSA). Auto loan YoY growth has steadily decelerated over the past five quarters. The fourth quarter of 2021 saw a high of a 13.74% YoY growth compared to the first quarter of 2024 YoY growth rate of 2.41%. This slow down partially reflects higher auto rates, which currently sit at 8.22% (60-month new car loans). Discover more from Eye On Housing Subscribe to get the latest posts to your email.

Slower Gains for Consumer Credit2024-06-11T11:16:26-05:00

Mortgage Rates Remained Elevated in May

2024-06-07T11:19:25-05:00

According to Freddie Mac, the average 30-year fixed-rate mortgage increased by 7 basis points (bps) in May 2024, reaching 7.06%, up from 6.99% the previous month. This represents a 64 bps increase from the previous year, when it stood at 6.34%. The 15-year fixed-rate mortgage also saw an increase, rising 8 bps from April 2024, and 54 bps compared to May 2023. As of the week ending June 7, 2024, the latest data shows a slight easing in mortgage rates, with the 30-year mortgage at 6.99% and the 15-year mortgage at 6.35%. On the other hand, the average 10-year Treasury yield decreased slightly by 6 bps after a sharp increase between March and April. Per the NAHB forecast, we expect 30-year mortgage rates to stay elevated at around 6.66% at the end of 2024 and eventually to decline to under 6% by the end of 2025. The NAHB outlook is for the federal funds rate to be cut at the December Federal Reserve meeting and six more rate cuts in 2025. Discover more from Eye On Housing Subscribe to get the latest posts to your email.

Mortgage Rates Remained Elevated in May2024-06-07T11:19:25-05:00

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