Mortgage debt hits 4-year high, but delinquencies down

Mortgage debt is up, but delinquencies are continuing to drop, according to new data from the New York Fed

Mortgage debt has hit a four-year high, but delinquencies are down, according to a new report from the Federal Reserve Bank of New York.

Household debt as a whole is on the rise, according to the bank’s Quarterly Report on Household Debt and Credit, with the bulk of the $136 billion aggregate debt increase coming from mortgages. Total mortgage debt increased $120 billion from the fourth quarter of 2015, hitting a four-and-a-half-year high. Credit scores also tightened slightly, with 58% of all new mortgage dollars going to borrowers with scores above 700, according to the report.

Overall repayment, however, was improved in the first quarter. Just 5% of all outstanding debt was in some stage of delinquency, the lowest rate since 2007. Mortgage delinquencies in particular also improved; 2.1% of mortgage balances were 90 days delinquent in Q1, down from 2.2% in the fourth quarter of 2015.

“Delinquency rates and the overall quality of outstanding debt continue to improve,” said Wilbert van der Klaauw, senior vice president at the New York Fed. “The proportion of overall debt that becomes newly delinquent has been on a steady downward trend and is at its lowest level since our series began in 1999. This improvement is in large part driven by mortgages.”