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Regional & Community Outreach connects the Bank to Main Street via structured dialogues and two-way conversations on small business, mortgages, and household credit.
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Michael Gedal, Stephanie Rosoff, and Joelle Scally
The New York Fed has released a new product—the Household Debt and Credit Report for the Second District—which tracks consumer credit conditions in the tri-state area. Our readers are already familiar with our Quarterly Report on Household Debt and Credit, which primarily tracks credit measures—including balances, delinquencies, and new originations—aggregated to the national level. This report will provide a detailed examination of borrowing and repayment behavior on an ongoing basis for New York, New Jersey, and Connecticut, and each of the five boroughs of New York City. It is based on the New York Fed’s Consumer Credit Panel (CCP), a 5 percent representative sample of credit reports from Equifax. In this post, we highlight selected findings from these new regional profiles.
Andrew Haughwout, Donghoon Lee, Joelle Scally, and Wilbert van der Klaauw
The New York Fed released the Quarterly Report on Household Debt and Credit for the third quarter of 2014 today. Balances continued to rise slightly, with an overall increase of $78 billion. The aggregate household debt balance now stands at $11.71 trillion, up 0.7 percent from the previous quarter, but still well below the peak of $12.68 trillion in the third quarter of 2008.
Today, we are releasing new data on consumers’ experiences and expectations regarding credit demand. We’ve been collecting these data every four months since mid-2013, as part of our Survey of Consumer Expectations (SCE). Other data sources describing consumer credit either provide aggregates that are an interaction of credit supply and demand (such as the FRBNY Consumer Credit Panel), or show only short-term changes in supply and demand (as reported by the supply side in the Senior Loan Officer Opinion Survey), or are too infrequent to provide a real-time picture of changes in consumer credit demand and access (Survey of Consumer Finances). The goal of the SCE Credit Access Survey—which will henceforth be published every four months—is to fill this void. In this blog post, we provide an overview of the survey and highlight some of its features.
Recent activity in the U.S. housing market has been widely perceived as disappointing. For instance, sales of both new and existing homes were about 5 percent lower over the first half of 2014 than over the first half of 2013. From a longer-term perspective, a striking statistic is that the homeownership rate in the United States has fallen from 69 percent in 2005 to 65 percent in the first quarter of 2014. This decrease in homeownership is particularly pronounced for younger households, implying that many of them are remaining renters for longer than in the past. In this post, we use survey evidence to shed some light on what is driving this sluggish transition from renting to homeownership.
Basit Zafar, Andreas Fuster, Wilbert van der Klaauw, and Matthew Cocci
In February 2014, we administered a survey on housing-related issues to the Survey of Consumer Expectations (SCE) panelists. Our primary goal was to secure rich and high-quality information on consumers’ experiences and expectations regarding housing. The survey, among other things, collected data on households’ perceptions and expectations of the growth in home prices, their intentions regarding moving or buying a new home, and their access to credit. In addition, for homeowners, we collected detailed information on their mortgage debt, past experiences such as foreclosure or refinancing, and expectations regarding future actions, such as taking out new debt or investing in the home. We are releasing the findings as a chart packet today, and in this post summarize some findings.
Andrew Haughwout, Donghoon Lee, Joelle W. Scally, and Wilbert van der Klaauw
Today, the New York Fed released the Quarterly Report on Household Debt and Credit for the second quarter of 2014. Aggregate debt was relatively flat in the second quarter as housing-related debt shrank, held down by sluggish mortgage originations. But non-housing debt balances increased across the board, with especially strong gains in auto loans. Auto loan balances, which include leases, have increased for thirteen straight quarters, and originations have not been this high since the third quarter of 2006. The Quarterly Report and the following analysis are based on data from the New York Fed’s Consumer Credit Panel, a nationally representative sample drawn from anonymized Equifax credit data.
We read with interest a new Brookings Institution report, Is a Student Loan Crisis on the Horizon?, assessing the weight of the student debt burden. It was also pleasing to see the New York Times, several of our Twitter followers, and others citing work on this blog in counterpoint.
Basit Zafar, Zachary Bleemer, Meta Brown, and Wilbert van der Klaauw
U.S. student debt has more than tripled since 2004, and at over $1 trillion is now substantially greater than both credit card and auto debt balances. There are substantial potential benefits to be gained from taking out a student loan to fund a college education, including higher earnings and lower unemployment rates for college grads. However, there are significant costs to having student debt: The loans frequently carry relatively high interest rates, delinquency is common and costly (involving potential late fees and collection fees), and the federal government has the power to garnish the wages of individuals with delinquent federally guaranteed student loans (in fact, reported federal recovery rates on defaulted direct student loans exceed70 percent). The ability of U.S. households to make well-informed decisions regarding higher education and student loan take-up for themselves (or members of their households) depends on the extent to which they accurately perceive the costs and benefits of such choices. To what extent does the American public understand the implications of student loan indebtedness? To shed light on this question, we went out and surveyed U.S. households.
Basit Zafar, Max Livingston, and Wilbert van der Klaauw
Total consumer debt continued to increase in the first quarter of this year, marking the first time since the recession that aggregate debt had grown for three consecutive quarters, according to the May 2014 Quarterly Report on Household Debt and Credit. Is this increase in household debt driven by changes in supply or demand? The January 2014 and April 2014 Senior Loan Officer Opinion Surveys (SLOOS) show an increase in lenders’ willingness to make consumer loans over the last several quarters and an increase in the number of lenders reporting looser lending standards, which indicates that credit supply is increasing. To get a better sense of the underlying factors in the evolution of household credit conditions, in February we surveyed 1,110 respondents of the New York Fed’s Survey of Consumer Expectations (SCE) about their ability to obtain credit over the past twelve months and their expectations about future credit access.
Last year, our blog presented results from the FRBNY Consumer Credit Panel (CCP) indicating that, at a time of unprecedented growth in student debt, student borrowers were collectively retreating from housing and auto markets. In this post, we compare our 2012 findings to the news for 2013.
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