Consumer credit hits record high as incomes rise

Consumer credit balances reached a record high in the fourth quarter of 2024, surpassing $18 trillion for the first time. This milestone was reported by the Federal Reserve Bank of New York in its Quarterly Report on Household Debt and Credit, which uses data from the bank’s Consumer Credit Panel/Equifax. The report highlighted a $93 billion increase from the third quarter of 2024 and a $530 billion rise compared to the same period in 2023.

Home mortgages represented the largest portion of consumer credit balances at year-end, with over $12.6 trillion in outstanding mortgage credit, making up nearly 70 percent of the total. Home equity lines of credit (HELOCs), also secured by residential real estate, contributed an additional 2.2 percent.

Among non-residential types of consumer credit, auto and student loans held significant balances at $1.7 trillion and $1.6 trillion respectively, each constituting around 9 percent of the total debt. Credit card balances stood at $1.2 trillion, accounting for 6.7 percent of total consumer debt. Other loans, including personal loans and retail finance options, amounted to just over $0.5 trillion or 3.1 percent.

In terms of growth during 2024, revolving loan products such as HELOCs saw a 10 percent increase from Q4 to Q4, while credit cards grew by 7.3 percent over the same period—both outpacing overall consumer credit growth rates. Auto loan balances rose by 3 percent annually matching overall growth pace; however, mortgage balances grew slightly slower at a rate of 2.9 percent Q4/Q4.

These findings align with data from the Federal Reserve Board of Governors’ monthly G.19 Consumer Credit report that estimated non-housing consumer credit outstanding at $5.15 trillion as of December—up by 2.4 percent from end-2023 levels—and indicated faster growth in revolving than nonrevolving balances towards late-2024.

While credit balances have hit unprecedented levels so have household incomes: "The ratio of outstanding consumer credit balances reported by the New York Fed to disposable personal income fell to its lowest in three-and-a-half years," illustrating this point further when placed within context across two decades worth historical data range where it remains relatively low-end according recent observations made throughout final quarter last year."

Additionally providing detailed insights into loan originations along performance metrics broken down age cohorts geographical distribution patterns alike found within comprehensive analysis conducted through release itself meanwhile next issue American Financial Services Association's Economy Matters newsletter scheduled February twenty-fifth expected offer deeper dive aspects contained therein mentioned earlier sources confirm