It seems that homeowners are facing less debt these days. The total balance of home finance write-offs year-to-date in July 2013 is $96.3 billion, a decrease of more than 22% from same time a year ago and the lowest since 2007, a report by Equifax revealed.

“Only two major consumer credit segments are currently growing: auto financing and student loans,” said Equifax Chief Economist Amy Crews Cutts. “In all other segments, consumers are reducing their debt burdens, either negatively, through foreclosures and bankruptcies or positively, through payoffs — payoffs are dominating in most cases today. We expect mortgage balances to begin rising again over the next several months as new home purchase loans overtake foreclosures and payoffs.”

Bill Emmons, senior economic adviser at the Center for Household Financial Stability at the St. Louis Fed, believes it’s a healthy thing if balances begin to rise again.

The balance has shifted away from primarily foreclosures, said Emmons, but they’re still quite elevated. “Every month, every quarter that goes by, there are more people that are getting back into the position where they could take on a new mortgage or even increase their borrowing,” he said.

“Everything is moving in the direction toward a more normal or healthy market, but there are still so many lingering problems,” added Emmons.

Equifax’s Crews Cutts noted that there are still people losing their homes to foreclosure because it’s such a slow process.

Deleveraging comes from two parts, said Crews Cutts: People are losing homes to foreclosure and people paying off their debts faster than they are taking on new ones. However, foreclosures are waning and purchases are accelerating. “If home purchases start to dominate and foreclosures become less of a burden, we all are happy,” she joked.

We’ve turned a corner, she added, people are buying houses again, whether it be move-up buyers or those moving from renting to owning.

“We’ve seen some great house price performance over the past year and that will help to bolster everything,” said Crews Cutts.

“There’s a view that house prices will start to moderate as more people move into positive equity territory and maybe they will be able to offer those homes for sale without having to do a short sale,” she said.

According to Emmons, consumers have become smarter about their money following The Great Recession, but it could take years before things begin to level off. “If you look at the relationship between the amount of debt overall versus income, it looks like we’re still quarters or even years away to getting back to the previous level.”

“All these trends are going to depend on how the economy performs,” he added.