The situation in household debt remains tepid according to the latest household debt report from the NY Fed. According to the report Q2 household debt fell slightly:
“Aggregate consumer debt was roughly flat in the 2nd quarter of 2014, showing a minor decrease of $18 billion. As of June 30, 2014, total consumer indebtedness was $11.63 trillion, down by 0.2% from its level in the first quarter of 2014. Overall consumer debt still remains 8.2% below its 2008Q3 peak of $12.68 trillion.”
Mortgages, the largest component of household debt, accounted for the decline:
“Mortgages, the largest component of household debt, decreased by 0.8%. Mortgage balances shown on consumer credit reports stand at $8.10 trillion, down by $69 billion from their level in the first quarter. Balances on home equity lines of credit (HELOC) also dropped by $5 billion (1.0%) in the second quarter and now stand at $521 billion.”
Outside of housing there was a broad gain in household debt:
“Non-housing debt balances increased by 1.9 %, boosted by gains in all categories. Auto loan balances increased by $30 billion; student loan balances increased by $7 billion; credit card balances increased by $10 billion; and other non-housing balances increased by $9 billion.”
The continued weakness in housing is a direct extension of the weak consumer balance sheet. It’s a worrisome sign to say the least. While the de-leveraging appears to be ending (or at least slowing) there are still substantial signs of fragility at work.