U.S. consumers accumulated debt at a slower rate in the second quarter, but the amount of credit card holders falling behind on their bills ♎hit levels not seen in more than a decade, according to data released Tuesday.

According to the Federal Reserve Bank of New York's Quarterly Report on Household Debt and Credit, 10.93% of credit card accounts were delinquent by more than 90 days, the highest it's been since the first quarter of 2012. Auto loans delinquencies🌌 of 90+ days hit 4.43%, the highest le🍸vel since the first quarter of 2021.

“The consumer looks to be in a decent place but the delinquency rates for auto loans and credit cards continue to be something that we’re keeping an ey🎉e on,” said a New York Fed researcher on a backg🧸round call. 

Th꧒e repo꧂rt showed that total household debt rose by $109 billion in the second quarter, an increase of 0.6%, down from the 1.1% rise in the first quarter.

About 3.2% of outstanding debt was in some stage of 澳洲幸运5官方开奖结果体彩网:delinquency, but when compared with pre-pandemic levels, delinquencies overall were much lower.

Homeowners Turning to HELOC Loans

Consumers took out mortgages at about the same pace as over the past year, though refinancing activity was limited due to high mortgage rates, and delinquency ra♒tes were 🎶still low, New York Fed researchers said. 

More homeowners turned to 澳洲幸运5官方开奖结果体彩网:home equity lines of cr💧edit (HELOC) as a means of getting value from their rising home values without having to risk their already low 澳洲幸运5官方开奖结果体彩网:mortgage rates, which many got when rates were at their lowest in 2022. Mortgages rates have been at decades-high levels, though have started to 澳洲幸运5官方开奖结果体彩网:move lower lately amid expectations the Federal Reserve will cut interestꦉ rates soon.

These lines of credit, which use the borrower’s home as collateral, offer lower rates than credit cards. They also give homeowners access to cash without having to refinance their ho🧸me, which is how homeowners generally get cash from their property values when mortgage rates ar𒐪e low. 

Both new HELOC lines and draws from existing accounts increased in the 2024 second quarter, economists said. While the total debt from HELOCs remained constant from the first quarter, it's still at its highest levels since the 2021 first quarter. 

“It’s a turnaround of such a long decline of a product that was maybe unappealing when a cash-out refinance at a low rate would have been more appealing for a borrower,” the New York Fed researcher said.