49
MORTGAGE
DEBT
INCREASED
IN Q4
Mortgage balances rose by $120 billion
in Q4 2019 according to the Federal
Reserve Bank of New York. Total household
debt increased by $193 billion (1.4%) to
$14.15 trillion in Q4.
"Mortgage originations, including
refinances, increased significantly in the
final quarter of 2019, with auto loan
originations also remaining at the brisk pace
seen throughout the year," said Wilbert Van
Der Klaauw, SVP at the New York Fed.
"The data also show that transitions into
delinquency among credit card borrowers
have steadily risen since 2016, notably
among younger borrowers."
The New York Fed's study also covered
delinquency transitions, which remained
largely unchanged in Q4 2019 compared
to recent quarters. Transitions from early
delinquency deteriorated in the fourth
quarter, as 17.4% of mortgages in early
delinquency (30-60 days late) transitioned
into 90+ days delinquent.
Mortgage originations jumped to the
highest volume seen since Q4 2005, rising
to $752 billion in the fourth quarter from
$528 billion in Q3 2019, due to a large
increase in refinance activities. Among
newly originating mortgage borrowers, the
median credit score stood at 770, a 5-point
increase from the Q3 2019. Auto loan
originations remained high at $159 billion
in the fourth quarter of 2019.
As debt increases, many Americans are
feeling burdened, though mortgage debt is
not the leading debt burden. A new survey
by LendingTree found that almost 60% of
Americans feel burdened by debt in 2020,
with 12.4% most concerned about mortgage
debt.
The report states that even though
mortgage debt is the largest source of debt,
people feel less burdened by it, as that type
of debt is considered a "good debt" as it
contributes to consumers' financial future.
Fourteen percent of all millennials
surveyed said they were concerned about
mortgage debt—the highest among the
three generations polled. 13 percent of
Gen X's surveyed were concerned about
mortgage debt and just 10% of Baby
Boomers reported they were worried about
the topic.
