NEW YORK–Americans are borrowing more to finance automobiles but less to houses, according to a new report from the Federal Reserve Bank of New York.
According to the report, mortgage obligations declined in Q4 2018 to $401.5 billion from $445.3 billion in Q3, the lowest level since the first quarter of 2016 in nominal terms. Mortgage originations for all of 2018 were at the lowest level since 2014, the Fed said.
Meanwhile, auto loans continue to grow as they have since 2010. During 2018, new auto loans saw their highest volume on record at $584 billion, according to the New York Fed.
The Fed added that as of the fourth quarter, approximately 30% of loans went to borrowers with credit scores above 760, while subprime borrowers were responsible for 22% of all auto-loan balances.
Some Delinquencies Tick Up
The Fed data show U.S. household debt rose by $32 billion to $13.54 trillion in the fourth quarter, the 18th consecutive increase. Household debt now stands at $869 billion above the previous peak reached in 2008.
Despite the increased debt, the Fed reported 95.4% of balances were current at year end/
While mortgage delinquencies have declined, auto-loan delinquencies have risen steadily since 2014, with approximately 4.47% of auto-loan balances delinquent in the fourth quarter, the Fed said. More than 8% of borrowers with credit scores below 620 became delinquent during Q4.