Wednesday, February 12, 2020

The State of America's Debt

Household debt surged in 2019, marking the biggest annual increase since just before the financial crisis, the New York Federal Reserve reported yesterday. Total household debt balances rose by $601 billion last year, topping $14 trillion for the first time. The last time the growth was that large was 2007, when household debt rose by just over $1 trillion.

The growth was driven mainly by a large increase in mortgage debt balances, which rose $433 billion. That was the largest gain for that figure since 2007. Housing debt now accounts for $9.95 billion of the total balance.

Balances for auto loans and credit cards both increased by $57 billion for the year. Credit cards have surpassed student loans as the most common form of first credit among young borrowers, after several years when student loans were higher.

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