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The economic recovery is certainly in full swing and has been for some time now. That, coupled with better habits related to handling debts of all kinds, has led millions of consumers to see significant improvements in their finances over the last few years.

Household debt of all kinds slipped some $110 billion in the first three months of the new year alone, bringing total nationwide obligations to just $11.23 trillion, down appreciably from the all-time high of $12.68 trillion observed in the third quarter of 2008.

Here are seven signs that household finances got stronger in the first quarter of the year, based on data from the latest Household Debt and Credit Report issued by the Federal Reserve Bank of New York.

  1. Only two types of debt — student and auto loans — actually increased during the first quarter of the year, as the former rose another $20 billion to a total of $986 billion nationwide, continuing a trend seen over the last several years. The latter, meanwhile, ticked up $11 billion to $794 billion during that time.
  2. Home equity lines of credit slipped $11 billion to just $552 billion.
  3. Mortgage debt fell $7.93 billion to $8.03 trillion
  4. New foreclosure notifications slipped 12.5 percent from the previous quarter to just 184,000 households nationwide, marking the fourth straight three-month period in which there has been a decline in this area.
  5. The drop in mortgage debts came even as lenders issued $577 billion in new mortgage credit thanks to the sixth straight quarter of increases in new originations.
  6. Credit card balances slipped some $19 billion from January to March, bringing the national total owed on these accounts to just $660 billion.
  7. Significantly late payments on every type of credit listed above dropped, bringing the national 90-day delinquency rate to just 6 percent of all balances, down from 6.3 percent the previous quarter and 8.7 percent at the all-time high in the same period three years earlier.

Experts have long speculated that rates of delinquency and default must logically bottom out at some point in the near future, but consumers keep defying those expectations.

Many borrowers changed their habits as it relates to debt in general as a result of the financial difficulties they faced during and even following the recent recession, during which time default rates skyrocketed and led to consumers having bad credit and other significant financial difficulties.

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