The Mornings With Maria panel provides a response to the December employment report, detailing its impact on the US economy.
American household debt levels, including credit card debt, rose to a new high in the fourth quarter of 2024, according to a report by the Federal Reserve Bank of New York.
The report showed that overall household debt increased to $93 billion at $18.04 trillion at the end of 2024, a record high. Credit card balances rose by $45 billion from the previous quarter to $1.21 trillion at the end of December. This is also a record high.
The delinquency rate is 3.6% of outstanding debt at some stages of late, up 0.1 percentage points from the previous quarter. delinquency. Serious delinquency, defined as a deadline of 90 days or more, moved higher in the case of car loans, credit cards, and HELOC balances, but was stable on mortgages.
The New York Fed shows that the report is doing well in that Americans generally manage household debt, but rising prices and interest rates are a problem for some car loan borrowers He pointed out that there are signs that it is causing the
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American household debt reached a new record in the last quarter of 2024. (Spencer Platt/Getty Images/Getty Images)
“Overall, consumers are in very good condition regarding the prospects of household debt, driven primarily by stable balances and solid performance of mortgages,” a New York Fed economic researcher posts in the report I'm writing this in.
“However, in the case of car loans, the combination of higher car prices and higher interest rates increases monthly payments, putting pressure on consumers across the spectrum of income and credit scores,” they wrote It's there. “The rapidly rising episodes of car prices have had a uneven impact on borrowers who have shifted between used and new cars, and between loans and leases.”
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American credit card debt reached an all-time high at the end of 2024. (istock / istock)
A decline in used cars' prices could be burdensome borrowers who purchased used cars when prices go up, and could leave those loans underwater, New York said.
“These shifts put additional pressure on low-income and low-credit score borrowers who may have had to choose a higher-priced used car in the past few years,” the researcher wrote .
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By the end of 2024, serious mortgage delinquency declined. (Photographer: Getty Images/David Paul Morris via Getty Images/Bloomberg)
“The prices of used cars will then fall from their peak, leaving some borrowers underwater in those vehicles, creating potential repayment challenges,” they added. “At the same time, a drop in car prices could mean that the vintages of recently born car loans will get better as those loans get older.”
Bank data shows that the number of consumers with additional bankruptcy records from the fourth quarter was 123,000 in the fourth quarter.
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Consumers with third-party collections have been “relatively stable” in the fourth quarter of what is listed on their credit records, according to the New York Fed.
