NEW YORK (Bloomberg) -- Americans took out the most auto loans in nine years during the third quarter, according to the Federal Reserve Bank of New York’s quarterly Household Debt and Credit Report.
Loan originations for new and used cars totaled $105 billion, the highest amount since the third quarter of 2005. That’s in line with industry reports of stronger new light-vehicle sales, boosting the contribution of consumer spending to third-quarter U.S. growth.
Auto loan balances have now risen for 14 straight quarters, the New York Fed said.
“Outstanding household debt, led by increases in auto loans, student loans and credit card balances, has steadily trended upward in recent quarters,” said Wilbert van der Klaauw, senior vice president and economist at the New York Fed.
The report released Tuesday is based on data from the New York Fed’s Consumer Credit Panel, a national sample drawn from Equifax credit data.
Outstanding household debt rose by $78 billion in the third quarter compared with the previous three months, to $11.71 trillion. This remains below a $12.68 trillion peak reached in the third quarter of 2008, before borrowing collapsed during the financial crisis.
All categories of loans increased except for home equity lines of credit, where balances fell by $9 billion, continuing a three-year decline.
Subtracting loan repayments from new loan origination, mortgage debt balances rose by $35 billion and non-housing debt was up by $48 billion, led by a $29 billion increase in auto loan balances, an $11 billion increase in credit-card debt and an $8 billion rise in student loans.
“It appears that the deleveraging period has come to an end and households are borrowing more,” van der Klaauw said.
There was also little change in loan quality, with delinquency rates in the third quarter at 6.3 percent compared with 6.2 percent in the second quarter. About $732 billion of debt is delinquent, with $506 billion classed as “seriously delinquent,” or 90 days or more overdue.