Consumer credit still weak outside of select sectors and for certain borrowers

By most accounts, household deleveraging appears to be over. Auto and student loans have been strong throughout the recovery, and mortgage lending is beginning to turn the corner. But using data adjusted for inflation, consumer credit appears weaker, say Federal Reserve Bank of Cleveland researchers O. Emre Ergungor and Daniel Kolliner. For example, while nominal mortgage balances have reached their 2007 level and are increasing, in real terms mortgages are flat at their 2005 level, and auto loan balances are below their pre-crisis peak.

Looking at the mortgage market, the researchers say those with strong credit scores appear to be benefiting the most from current low borrowing costs. However, everyone appears to be benefiting from the auto loan boom.

Read Households Ease Up on Adding New Debt.

Federal Reserve Bank of Cleveland

The Federal Reserve Bank of Cleveland is one of 12 regional Reserve Banks that along with the Board of Governors in Washington DC comprise the Federal Reserve System. Part of the US central bank, the Cleveland Fed participates in the formulation of our nation’s monetary policy, supervises banking organizations, provides payment and other services to financial institutions and to the US Treasury, and performs many activities that support Federal Reserve operations System-wide. In addition, the Bank supports the well-being of communities across the Fourth Federal Reserve District through a wide array of research, outreach, and educational activities.

The Cleveland Fed, with branches in Cincinnati and Pittsburgh, serves an area that comprises Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia.

Media contact

Doug Campbell, doug.campbell@clev.frb.org, 513.218.1892