Americans displayed a selective willingness to borrow money during the spring, taking out new auto loans at the fastest pace in nearly eight years while fresh home loans tumbled to the lowest level since 2000.
Total outstanding household debt—including mortgages, credit cards, auto loans, student loans and home-equity lines—sank $18 billion between April and June to $11.63 trillion, according to a report released Thursday by the Federal Reserve Bank of New York. It marked the first decline after three quarters of increases.
Auto lenders made $101 billion in new loans in the second quarter, the highest since the third quarter of 2006. Total auto-loan balances grew by $30 billion to $905 billion.
The amount of new mortgage loans extended in the quarter fell to the lowest level since 2000.
The amount of new mortgage loans extended in the quarter fell to $286 billion, the lowest level since 2000, and half the $589 billion in the second quarter of 2013.
Total mortgage debt outstanding fell by $69 billion from the prior quarter to $8.09 trillion. Home-equity lines of credit fell by $5 billion on a quarterly basis to $521 billion.
Banks have begun slowly to ease their underwriting standards for mortgage loans—though they remain stringent relative to the peak of the housing bubble. A Federal Reserve survey of bank-loan officers last week found nearly a quarter eased standards on mortgages made to borrowers with good credit, the first sign of a thaw on that front since the housing bust.
