HousingWire reports the New York Federal Reserve says consumer indebtedness fell by 0.6 percent in the third quarter as mortgage balances and credit card limits continued declining. Total consumer debt dropped from $11.72 trillion in Q2 to $11.66 trillion the quarter recently ended. Bankruptcies fell 18.8 percent from Q3 2010, new foreclosures declined seven percent from Q2 of this year, and reversing a recent trend in reductions, 2.5 percent of current mortgage balances moved into the delinquency column quarter ending 9-30-2011. Consumer credit reports reveal mortgage balances fell 1.3 percent, about $114 billion during the third quarter of this year. Meanwhile, home equity lines of credit balances increased by 2.3 percent, roughly $14 billion, over the same period. Andrew Haughwout, vice president in the research and statistics group at the New York Fed said, “The decline in outstanding consumer debt reveals that households continue to try and deleverage in the wake of a challenging economic environment and large declines in home values. However, our findings also provide evidence that consumer credit demand continues to increase, a positive sign for consumer.”

(Graphic credit: New York Fed)