Trends in Household Debt

One of the signs that our economy is growing is that people are continuing to pay down their household debt. Even as consumer spending has been increasing  - it was up 0.4 percent in July -  consumer debt fell by $53 billion in the second quarter.

At the end of the second quarter of 2012, total consumer indebtedness had fallen to $11.38 trillion, 0.5 percent lower than its level at the end of the first quarter of 2012. The biggest driver of this reduction has been the drop in real estate loans. Mortgage balances are down 0.5 percent from the first quarter of this year, and  home equity lines of credit balances dropped by 3.7 percent.

Aside from mortgages and HELOCs, household debt balances actually increased by 0.4 percent in the second quarter. One of the biggest causes was an increase of $14 billion in auto loans - good news for the continuing strength of our auto industry.