How Much Do You Owe? US Household Debt Increases In Q4 To Record

U.S. households added $193 billion dollars in debt in the last quarter of 2019, boosting the total to a record $14.15 billion, the Federal Reserve Bank of New York reported Tuesday.

The previous peak was $12.68 billion in the third quarter of 2008.

Last quarter’s 1.4% increase marked the 22nd straight quarter of increase.

Mortgage balances made up the largest proportion of that debt, rising $120 billion in the quarter to $9.56 trillion, while credit card debt hit a record $930 billion.

“Mortgage originations, including refinances, increased significantly in the final quarter of 2019, with auto loan originations also remaining at the brisk pace seen throughout the year,” said Wilbert Van Der Klaauw, senior vice president at the New York Fed.

Non-housing debt balances – including auto loans ($16 billion), credit cards ($46 billion) and student loans ($10 billion) – rose $79 billion in the quarter.

Mortgage originations rose to their highest volume since the fourth quarter of 2005, with credit scores for borrowers up 5 points to an average 770. Mortgage delinquencies were steady at 1% of balances for those whose payments were 30 days late and 17.4% for those 30- to 60 days late. Approximately 71,000 mortgages were in foreclosure for the quarter.

Van Der Klaauw noted increasing credit card debt also has brought an increase in the number of delinquencies, especially among younger borrowers.

The New York Fed blog noted credit cards are the most commonly used form of consumer credit with more than 60% of Americans with a credit report carrying at least one card, including half of younger borrowers.

Among credit card holders, delinquency rates rose from 5.16% in the third quarter to 5.32% in the fourth quarter, with serious delinquency among those 18 to 29 years of age at 9.36%.

Outstanding student debt stood at $1.51 trillion, up $51 billion from last year.