Households continued to improve their finances during the first quarter of 2013, according to the Federal Reserve Bank of New York's latest report.
Outstanding household debt declined $110 billion from the previous quarter, due in large part to a reduction in housing-related debt and credit card balances.
Meanwhile, deliquency rates also declined, with 8.1% of outstanding debt in some stage of deliquency, compared with 8.6% from the previous quarter.
In Q1 2013, total household indebtedness fell to $11.2 trillion, 1% lower than the previous quarter and considerably below the peak of $12.7 trillion in the third quarter of 2008.
Deliquency rates improved across the board with mortgages falling to 5.4% from 5.6% in the fourth quarter of 2012.
The overall 90-plus day delinquency rate dropped from 6.3% to 6% this quarter, well below the 8.7% peak from three years ago.
Mortgage originations rose for the sixth consecutive quarter to $557 million, the report stated.
"After a temporary deceleration in the previous quarter, the data suggest that household deleveraging has resumed its previous trajectory," said Wilbert van der Klaauw, senior vice president and economist at the New York Fed.
He added, "We’ll look to see if this pace of debt reduction and delinquency improvements will persist in upcoming quarters."