According to a recent report from the Federal Reserve Bank of New York, consumer debt was on the increase at the end of 2018, at least with respect to loans other than mortgages. In the fourth quarter of 2018, the amount of non-housing consumer debt increased by a total of $58 billion. Student loans continued to be a source of household debt, with balances increasing across the country by a collective $15 billion.
Likewise, people were more willing to charge items on their credit cards, running up an additional $26 billion in credit card debt. The increase in popularity for using loans to purchase cars was also a noteworthy feature of this report, with balances increasing by $9 billion.
In contrast, the amount of mortgage debt stood at just over $9 trillion. Thus, while mortgages continue to be the predominant source of consumer debt, people are not taking on additional debt when it comes to buying and refinancing their homes.
On a related point, the popularity of home equity loans continues to wane, with balancing dropping to their lowest levels in well over a decade after a $10 billion decrease in the fourth quarter. What these statistics mean for those businesses in the White Plains area who offer credit to their customers is that the average New York home may be getting strapped with more and more unsecured debt. While this may be fine so long as the economy keeps chugging along, bills like credit cards, medical bills and other accounts are the first to get ignored when the job market tightens and families have to start making tough choices.