HOUSEHOLD DEBT CLIMBS TO RECORD ON NEW MORTGAGES

U.S. credit-card balances fell by the most on record last year even as households increased their total debt by taking on new mortgages, the Federal Reserve Bank of New York said. Total debt rose by US$206 billion in the fourth quarter, bringing the annual increase to 3 per cent to set a record of US$14.56 trillion, the data show. Home loans, which increased 5 per cent last year, crossed the US$10 trillion threshold for the first time. Credit-card debt rose slightly in the fourth quarter, but ended the year down 12 per cent from 2019, the largest annual decline ever in data analyzed by the New York Fed. The changes in household debt reflect the topsy-turvy nature of 2020, when record-low interest rates fuelled a surge in mortgage refinancings by wellheeled homeowners that at times overwhelmed lenders and investors.