Lowell R. Ricketts , Don E. Schlagenhauf
Consumer debt grew across the United States and all of the major metropolitan areas in the Eighth Federal Reserve District in the second quarter of 2016. While nonmetropolitan areas showed similar debt growth trends, the total debt in these larger geographic areas is smaller than the MSAs’. Those are two of the findings of this second issue of The Quarterly Debt Monitor, a detailed report on consumer debt nationally compared to the four largest metropolitan statistical areas (MSAs) in the District, which has headquarters in St. Louis.1
This report uses the latest release of the Federal Reserve Bank of NY/Equifax panel data, with the latest observation being the second quarter of 2016. A subset of the figures reported in the previous report is presented to offer a more focused narrative. The special section for this issue will focus on consumer debt trends within nonmetropolitan regions of the seven District states. For readers interested in seeing the full set of updated figures, see the QDM charts appendix. In addition, the appendix offers a detailed description of our methodology and definitions.
Executive Summary
In the second quarter of 2016, real per capita consumer debt grew across the United States and all of the major District MSAs except for Memphis. Auto and student debt continue to be the fastest growing debt categories.
Per capita mortgage debt grew marginally for St. Louis and the nation, while declining slightly in Little Rock. Mortgage debt holdings in Louisville exhibited the strongest growth, with a 1.7 percent increase over the past year. In contrast, Memphis declined significantly (3.5 percent), pushing the total level of mortgage debt in Memphis further below 2003 levels.
Auto debt grew at an average rate of about 8 percent across the nation as well as in the four MSAs. That outpaced the growth rate for any other type of debt by a large margin. Auto debt in the largest MSAs, save for Louisville, exceeds pre-recession levels.
Serious delinquency rates for mortgage and credit card debt declined in both the four MSAs and the nation. However, the fraction of auto and student debt that is seriously delinquent jumped by a significant margin in both Louisville and Little Rock. In contrast, serious delinquency rates fell for all types of debt in St. Louis, including a 2.1 percentage point drop for student debt. Despite mostly falling rates, Memphis continues to have the highest serious delinquency rate across all types of debt.
With the exception of St. Louis, the size of total debt across nonmetropolitan areas of each state was close (80 percent) to that of the respective MSAs. A comparison of consumer debt trends in nonmetropolitan areas versus metropolitan areas shows similar growth trends for most types of debt. Within mortgage markets, nonmetropolitan areas experienced a milder deleveraging period following the recession. However, the average and total value of mortgage debt in metropolitan areas exceeds that found across nonmetropolitan areas as a whole.