Mortgage originations fell last year, while new auto loans hit all-time highs, according to a report by the Federal Reserve Bank of New York released on Tuesday.
New mortgage loans for 2018 were at the lowest level since 2014. Mortgage originations in the fourth quarter fell to $401.5 billion from $445.3 billion in the previous quarter, the lowest volume since the first quarter of 2016 in nominal terms, the Wall Street Journal reported. New auto loans totaled $584 billion, the highest volume on record.
The dip in new mortgages could be due to the recent slowdown in housing markets, after years of acceleration. The market is expected to keep cooling in 2019, as higher rates and steep prices deter buyers. Meanwhile, auto sales have continued their strong growth since the recession, and auto lending has been driven by borrowers with good credit scores.
The New York Fed’s quarterly report on household debt and credit is based on data from the credit-ratings firm Equifax.
Overall U.S. household debt rose to $13.54 trillion in the fourth quarter, the 18th consecutive increase and $869 billion above its previous 2008 peak. Student and auto loans are seen as the main drivers of the rise in household debt since 2013.
At the same time, Americans appear to be keeping up with their payments despite the higher debt loads. In the fourth quarter 1.06 percent of mortgage balances were overdue by 90 days or more, down from 8.89 percent in the first quarter of 2010. [WSJ] — Kevin Sun