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May 9, 2011

Just Released: Household Debt and Credit Developments in the Nation and the Region in 2011:Q1

Andrew F. Haughwout, Donghoon Lee, and Wilbert van der Klaauw

This post gives our summary of the 2011:Q1 Quarterly Report on Household Debt and Credit, released today by the New York Fed. The report shows signs of healing in household balance sheets in the United States and the region, as measured by consumer debt levels, delinquency rates, foreclosure starts, and bankruptcies— although the regional data are somewhat mixed. The report captures the debt and credit activity of an anonymous, nationally representative panel of U.S. households.

Per-capita consumer debt in the United States essentially held steady in the first quarter, ending a string of nine consecutive quarters of decline. Per-capita consumer debt in New York continued its decline, by 1.5 percent, while New Jersey extended its irregular pattern with an increase of 1.8 percent.

Delinquency rates are generally down. Nationally, households reduced their rates for the fifth consecutive quarter in 2011:Q1. As of March 31, 10.5 percent of outstanding debt was in some stage of delinquency, compared with 10.8 percent on December 31, 2010, and 11.9 percent a year ago. About 7.7 percent of consumer debt, or approximately $890 billion, was seriously delinquent (at least ninety days), a decline of 15 percent from a year earlier. While the share of seriously delinquent debt fell in New York from 9.5 percent to 9.1 percent, it increased in New Jersey from 7.3 percent to 7.9 percent.

New foreclosures fell nationally and in the region. About 368,000 individuals in the United States had a foreclosure notation added to their credit report between December 31 and March 31, a 17.7 percent decrease from the 2010:Q4 level. New foreclosure rates fell from 0.19 percent to 0.15 percent for all individuals nationwide, and the rates for New York and New Jersey respectively fell from 0.09 percent to 0.07 percent and from 0.20 percent to 0.12 percent.

New bankruptcies also declined. New bankruptcies noted on U.S. consumers’ credit reports fell 13.3 percent during the quarter, from 500,000 to 434,000. New bankruptcies per capita in 2011:Q1 were down from 0.21 percent to 0.18 percent nationwide, and they declined from 0.11 percent to 0.10 percent in New York and from 0.18 percent to 0.17 percent in New Jersey.

Overall, the data provide further evidence, as described in our regional press briefings of October 19, 2010, and February 14, 2011, that the worst of the housing crisis bypassed much of the region. This is made especially clear when New York and New Jersey are compared with states such as Arizona, California, Florida, and Nevada. Nonetheless, areas of significant credit distress still exist in the region.

For past reports and more information on U.S. credit conditions, including interactive maps and charts, visit the New York Fed’s U.S. Credit Conditions website. For more on the evolution of consumers’ credit behavior through 2010, see our post, “Have Consumers Been Deleveraging?

The views expressed in this post are those of the author(s) and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the author(s).

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