Categorized | Business

New report shows consumer debt grew slower in Hawaii than the nation in the past four quarters

MEDIA RELEASE

HONOLULU – The Department of Business, Economic Development and Tourism (DBEDT) today released a report, “Hawai‘i Consumer Debt Report: 2019 Update,” which shows that total consumer debt increased 2.3 percent for Hawai‘i consumers between the second quarter of 2018 and the second quarter of 2019, lower than the 4.1 percent increase at the national level. It is only the second year DBEDT has subscribed to the data to create the report. This is a continuation of DBEDT using a data-driven, knowledge-based tool to more effectively grow Hawai‘i’s economy toward diversification. Among the consumer financing methods; bank cards, home equity lines of credit, and personal loans were more popular in Hawai‘i while auto loans and student loans were more popular on the U.S. mainland than in Hawai‘i.

“The consumer debt growth rate of Hawai‘i was lower than that of the national average.  Also, delinquency rates are lower than the U.S. average in most of the loan categories, which shows that residents are managing their debt responsibly and is a reflection of the values of Hawai‘i’s people,” said DBEDT director Mike McCartney.

Chief State Economist Dr. Eugene Tian noted that the category with the highest growth in consumer debt between the second quarter of 2018 and second quarter of 2019 was personal loans for both Hawai‘i at 11.2 percent and the nation at 11.7 percent.  The growth in Hawai‘i’s personal loans was due to a combination of higher average balance and the number of accounts, a 4.5 percent increase and 6.5 percent increase, respectively. In contrast, the increase in personal loans at the national level was due primarily to an increase in the number of personal loans of 11 percent during the same period.

Between the second quarter of 2018 and second quarter of 2019, home equity loans was the category with the second highest growth in debt for Hawai‘i, at 7.9 percent. For the nation, the bank cards category had the second highest growth in debt at 6.0 percent. 

Following are some of the highlights of the report:

  • During the second quarter of 2019, Hawai‘i had a total of $84.4 billion in consumer debt, accounting for 0.6 percent of the total U.S. consumer debt of $14.0 trillion during that period.
  • Among the scored consumers, the average debt per person in Hawai‘i was $68,656, which was over $20,000 higher than the national average of $47,034 during the second quarter of 2019.
  • For Hawai‘i consumers, mortgage debt comprised the largest share of total consumer debt, at approximately 76 percent of total consumer debt in Hawai‘i, compared to 69 percent at the national level. However, in the nation and in Hawai‘i, only about 18 percent of the scored consumers had mortgage debt. 
  • Home equity lines of credit (HELOC) were about 5.2 percent and home equity loans were about 1.6 percent of the total consumer debt in Hawai‘i. Proportions of these categories were considerably lower in the nation, at 3.0 percent for a HELOC and about 1 percent for a home equity loan. 
  • Auto loans and auto leases in Hawai‘i comprised 5.2 percent of consumer debt compared to 9.3 percent in the nation. The percentage of consumers with auto loans or leases reflected this divergence, with 23.1 percent in Hawai‘i having an auto loan or lease compared to 30.4 percent nationally.
  • The total balance on bank cards as a share of total debt was 4.9 percent in Hawai‘i compared with 5.9 percent in the nation. On average, Hawai‘i consumers carried 1.8 bank cards, higher than the national average of 1.6 cards.
  • Student debt proportion to total debt was another area of divergence between consumer debt in Hawai‘i and the nation.  Student debt was about 5 percent of the total Hawai‘i consumer debt, while for the nation that proportion was at 10 percent.  In Hawai‘i, 34 percent of consumers had a student loan balance during the second quarter of 2019, while more than 49 percent of the U.S. consumers had student loan balances during the same period. Student loans were the one credit category where Hawai‘i had a higher delinquency rate than the nation.

The analysis in the report is based on data from Experian Information Solutions, Inc.  DBEDT started the data series in 2017 and plans to continue subscribing to the data and updating the report on an annual basis to monitor the status of Hawai‘i consumer debt and its relationship with the status of the economy.  

The report is available at: files.hawaii.gov/dbedt/economi…

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