Consumer debt eases despite growing student debt

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A decrease in the amount owed on mortgages helped drive overall U.S. consumer debt lower in the second quarter, even as Americans kept piling up student loan debt, data showed on Wednesday.

Total consumer debt fell 0.5 percent to $11.38 trillion compared to the first three months of the year, the New York Fed said in its quarterly household debt and credit report.

Since the financial crisis and recession, Americans have been paring back the large amount of debt they amassed during the housing boom.

Student debt has been the exception. Student loans have increased by $303 billion since the third quarter of 2008, at the same time as other forms of debt have fallen by $1.6 trillion.

In the second quarter, student debt rose $10 billion to $914 billion.

Auto loans also increased in the quarter, rising $13 billion to $750 billion.

Consumers kept paring real estate-related debt. Mortgage balances fell 0.5 percent to $8.15 trillion, while balances on home equity lines of credit dropped by 3.7 percent, or $23 billion.

Mortgage originations rose to $463 billion, a positive sign for a housing market that has been hampered by tight access to credit.

Overall delinquency rates improved, falling to 9 percent from 9.3 percent, as rates improved for mortgages, credit cards and auto loans. Credit card delinquencies stood at 10.9 percent, the lowest level since the last quarter of 2008.

1.8 percent of mortgage balances fell into delinquency, unchanged from the previous quarter.

Student loan delinquencies increased for the second quarter in a row. Loans that were 90 days or more behind increased to 8.9 percent from 8.7 percent.

The number of credit account inquiries over six months - an indicator of consumer credit demand - fell 2 percent to 167 million inquiries.

Copyright 2011 Thomson Reuters.