US household debt jumps nearly $400B last year
TOTAL debt held by US households surged by nearly $400 billion last year to more than $13.5 trillion, marking the sixth straight annual increase, even as home mortgages declined, according to data released on Tuesday.
That puts tota l debt $ 869 billion higher t han t he prev ious peak, just before t he start of t he globa l financial crisis in late 2008, t he New York Federa l Reser ve Bank said in its quarterly report.
A decade after t he crisis, mortgage debt increased $ 242 bil lion to $ 9.1 t r i l lion, but new home loans originated last year fell $131 billion to t he lowest point in four years, the data showed.
But auto loans and student debt continued to rise.
“Auto loan originations for 2018 reached an all-time high,” said Joelle Scally, administrator of the Center for Microeconomic Data at the New York Federal Reserve Bank.
Auto loans jumped $53 billion to $1.3 trillion – the highest in the 19-year history of the data – and despite a rise in loans going to more creditworthy borrower “its performance has been slowly worsening”.
“Growing delinquencies among subprime borrowers are responsible for t his deteriorating performance and younger borrowers are struggling most acutely to af ford t heir auto loa ns,” Scally said in a statement.
Student debt jumped $79 billion compared to 2017, to $1.5 trillion, according to the report.
Many economists see the rising student debt burden crimping the economy, preventing college graduates from buying homes.
Credit card debt a lso jumped $36 bil lion in t he year and, though it has yet to brea k t he $1 t rillion level, it was t he first time it hit t he 2008 peak, t he report said.
Delinquency rates for debt more than 90 days past due worsened for credit cards and auto loans but was about flat for mortgages and student debt.