The last three months saw the biggest jump in U.S. Household debt in roughly 14 years, according to the latest estimates from the New York Federal Reserve. Household debt, which includes mortgages, credit cards, auto loans, and student loans, increased by $313 billion in the second quarter of 2021, bringing Americans’ balance to $14.96 trillion.
A major driver of the increase was a growth in mortgage balances, which rose by $282 billion, or 2.8%, from the first quarter of 2021. Overall, mortgage debt now stands at $10.4 trillion.
About $1.22 trillion of that debt load was in the form of newly originated mortgage debt last quarter, with roughly $500 billion coming from new home purchases and about $700 billion stemming from refinancing, New York Fed researchers said Tuesday.
The good news, though, is that a majority of the borrowers taking out these new mortgages had “very good” credit scores of over 760.
Excluding housing, debt balances grew by $44 billion during the second quarter, with a $33 billion increase in auto loans and $17 billion rise in credit card balances offsetting the $14 billion decline in student loan balances.
“We have seen a very robust pace of originations over the last four quarters with new extensions of credit for mortgages and auto loans combined with rebounding demand for credit card borrowing,” Joelle Scally, administrator of the Center for Microeconomic Data at the New York Fed, said in a statement.
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