Skip to main content

Consumers Continue to Pay Down Their Total Debt

NationalMortgageProfessional.com
Jun 27, 2013

Consumers continued to see their total debt decrease in most major U.S. metropolitan areas in the first quarter of 2013, though the sharp declines some markets saw in 2012 have leveled off, according to new National Consumer Credit Trends Report data from Equifax. Overall consumer debt fell from $11.02 trillion in the first quarter of 2012 to $10.92 trillion in the first quarter of 2013. The decline in total consumer debt reflects mortgage debt write-offs as well as consumer efforts to pay down mortgage obligations; however, other forms of consumer debt are increasing. Over the past year, total mortgage and home equity debt obligations fell 3.1 percent to $8.4 trillion and total non-mortgage debt owed by consumers rose 7.1 prcent to $2.5 trillion. Consumers in Las Vegas, Miami and Phoenix areas saw the biggest declines over the past year in total debt outstanding at 5.9 percent, 5.5 percent and 4.3 percent respectively. The housing bust hit these markets early and harshly, resulting in record numbers of foreclosures. In a completed foreclosure, the borrower cedes the property used as collateral on the loan to the lender and the debt is extinguished. Consumers in four markets increased their consumer debt from the first quarter of 2012 to the  first quarter of 2013. In Dallas, Houston, St. Louis and Pittsburgh, consumers saw their total debt levels inch up. Houston was the only metro area among these four in which total mortgage debt also rose over the period. All four of these metro areas have diversified economies enjoying strong growth and relatively low unemployment supporting consumer willingness to take on additional debt. "It is encouraging to see credit demand and supply continuing to come into balance," said Trey Loughran, president of Equifax Personal Solutions. "Lack of access to credit impedes growth, and access to credit keeps the wheels of the economy moving." At the same time, consumers in many cities showed modest decreases in consumer debt, suggesting a more disciplined approach to credit. "We are seeing changes in consumer behavior," Loughran said. "People are paying down their debt faster and taking their access to credit more seriously. Many consumers got into trouble with credit before the recession, spent too much and are now approaching spending with greater caution."
Published
Jun 27, 2013
Rocket Pro Announces Major Initiatives

Company brings Rocket Tech, the Rocket Network and Rocket Marketing to mortgage brokers across the country

Industry News
Oct 19, 2021
FormFree Taps Amazon Web Services For Consumer Financial Identity Solutions

FormFree will use Amazon's blockchain technology to manage its latest consumer Financial DNA solution and its newly introduced FormFree Exchange.

Tech
Oct 19, 2021
Synergy One Lending Increases Its Capital By $50M

San Diego-based Synergy One Lending Inc. completed a $50 million corporate note financing with a consortium of institutional investors.

Industry News
Oct 19, 2021
TransUnion Sees Untapped Growth Opportunity For The Mortgage Industry

A study conducted by TransUnion, which explores the creditworthiness of low-to-moderate income consumers, revealed that the segment represents a $300 billion growth opportunity for the mortgage industry.

Analysis and Data
Oct 19, 2021
Zillow Stock Falls After It Halts Buying Houses To Flip

Zillow’s stock fell nearly 10% Monday after the company announced its Zillow Offers division would stop buying homes.

Industry News
Oct 19, 2021
MBA Swears In New Officers For 2021-22

Kristy Fercho, executive vice president and head of home lending at Wells Fargo, is the new chairman.

Industry News
Oct 18, 2021