Debt limits home-buying

WASHINGTON – Younger Americans are struggling to keep up with steadily rising student debt loads, a burden that is limiting their ability to buy homes.

The Federal Reserve Bank of New York said Tuesday that the percentage of student loans 90 days or more overdue rose to 11.3 percent in the final three months of last year, up from 11.1 percent in the previous quarter. That’s the highest in a year. Total student borrowing now stands at $1.16 trillion, the most on record and 7.1 percent higher than 12 months earlier.

Previous research by the New York Fed has found that younger Americans with student loans are less likely to take out mortgages than those without student debt. That’s a reversal from the pre-recession pattern.

“Student loan delinquencies and repayment problems appear to be reducing borrowers’ ability to form their own households,” said Donghoon Lee, a research officer at the bank.

Americans are also struggling with auto loans, the report showed, but are doing a better job keeping up with all of their other debts.

Just 7.3 percent of credit card balances are 90 days or more overdue, down from 7.5 percent in the previous quarter. Credit card delinquencies have fallen sharply since the Great Recession after reaching a peak of nearly 14 percent 4 1/2 years ago. The current level is near the lowest since the New York Fed began tracking the data in 1999.

Delinquency rates for mortgages and home equity lines of credit also fell in last year’s fourth quarter from the previous three months. About 3.1 percent of mortgages are delinquent, down from nearly 9 percent in early 2010. That’s still higher than the 1 percent to 1.5 percent that was typical before the recession.