U.S. households expanded their debt last quarter for the first time in more than two years as mortgage balances rose, according to a survey by the Federal Reserve Bank of New York.
Consumer indebtedness rose 0.3 percent, or $33 billion, to $11.5 trillion at the end of March from Dec. 31, according to a quarterly report on household debt and credit released today. Households have slashed debt by $1.03 trillion, or 8.2 percent, since it peaked in the third quarter of 2008 as the financial crisis was unfolding.
“We are beginning to see signs of credit markets healing gradually and evidence of greater willingness of consumers to borrow and banks to lend,” Andrew Haughwout, vice president and New York Fed research economist, said in a statement today.
Consumer borrowing rose for a sixth straight month in March, led by a gain in non-revolving credit, which includes auto loans, and a pickup in credit-card use, the Fed said May 6 in a report from Washington. Throughout the first quarter, banks eased lending terms as they forecast improvement in the economy and firms sought more loans, according to a Fed survey of senior loan officers released May 2.
Delinquency rates declined for the fifth straight quarter, with 10.5 percent of outstanding debt in “some stage of delinquency,” down from 10.8 percent on Dec. 31, according to the New York Fed survey released today. That’s also down from 11.9 percent a year earlier, the survey said.
The amount of new bankruptcies fell 13.3 percent to 434,000, which was 6.4 percent below their level a year earlier, according to the report.
About 368,000 consumers showed new foreclosures on their credit reports in the first quarter, 17.7 percent less than in the last three months of 2010, the survey showed.
Credit-card limits rose by about $30 billion, or 1 percent, in the first increase since the third quarter of 2008. Credit card balances declined by 4.6 percent.
Mortgage originations increased for the third straight quarter to $499 billion, 65 percent more than their low at the end of 2008, the survey showed.
The report is based on data compiled by the New York Fed’s Consumer Credit Panel, a “nationally representative random sample” from Equifax Inc. credit-report data, the statement said.
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