ATLANTA (2/27/14)--For the first time in more than three years, the total outstanding balances of home finance and credit card balances rose for three consecutive months, according to Equifax.
The latest Equifax National Consumer Credit Trends Report found that January saw outstanding balances of $8.59 trillion for home finance; $555.4 billion for financial institution-issued credit cards, and $62.2 billion for retailer-issued cards.
"Home purchase transactions, in which first time homebuyers take on entirely new mortgage debt and move-up buyers increase their existing mortgage debt, have finally overtaken foreclosures and accelerating pay-downs, resulting in increases home finance balances," said Equifax Chief Economist Amy Crews Cutts. "American consumers have shed more than $1.5 trillion in mortgage debt since the start of the financial crisis and only now seem interested in investing in housing again," she added.
The home finance category includes first mortgage, home equity installment and home equity revolving balances. First mortgage balances increased 2.5% to $7.9 billion from $7.7 billion--the largest year-over-year increase in more than three years.
Balances on retail cards have been edging up for some time, she said, perhaps because consumers want to pigeonhole large purchases or take advantage of special deals tied to retailer-issued cards.
More than 315 million loans are outstanding in financial institution-issued credit cards, the highest since October 2009. The total of new card accounts from January to November 2013 is 39.6 million, which is also a five-year high.
The total number of new retailer-issued card accounts increased 8.9% year over year, with 35.9 million new cards. That is the highest since 2007.