Friday, February 17, 2017

The Rise in Debt

Total household debt climbed to $12.58 trillion at the end of 2016, an increase of $266 billion from the third quarter, according to a report from the Federal Reserve Bank of New York. For the year, household debt rose by $460 billion -- the largest increase in almost a decade. We're just short of the record high for total consumer debt of $12.68 trillion, set in 2008.

Some of this is good news. Mortgage originations increased to their highest level since the Great Recession. Mortgage balances, which make up the bulk of household debt, ended the year at $8.48 trillion.

Non-housing debt -- which includes credit card debt and student and auto loans -- grew strongly too. Student loan debt balances rose by $31 billion in the fourth quarter, to a total of $1.31 trillion. Auto loans jumped by $22 billion; new auto loan originations climbed to a record high in 2016.

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