US household debt tops $14T, reaches new record
Debt being driven by surge in mortgage loans
(Reuters) - American households added $193 billion of debt in the fourth quarter, driven by a surge in mortgage loans, and overall debt levels rose to a new record at $14.15 trillion, the Federal Reserve Bank of New York said on Tuesday.
Mortgage balances rose by $120 billion in the fourth quarter to $9.56 trillion, the New York Fed said in its quarterly report on household debt. Mortgage originations - pushed up by an increase in refinancing - also rose to $752 billion in the fourth quarter, reaching the highest volume since the fourth quarter of 2005, the report found.
Non-housing debt, including auto loans, credit cards and student loans, rose by $79 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,'' Wilbert Van Der Klaauw, senior vice president at the New York Fed, said in a statement. "The data also show that transitions into delinquency among credit card borrowers have steadily risen since 2016, notably among younger borrowers.''
(AP Photo/Chuck Burton, File)
Some 2.36 percent of loans became more than 90 days delinquent in the fourth quarter, driven down by a low rate of delinquencies for mortgage loans. New foreclosures remained low by historical standards, with 71,000 notations added to credit reports between October and December.
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However, delinquencies rose for credit cards and student loans - with young borrowers seeing the biggest increase. Researchers said the rising delinquencies among borrowers in their 20s and 30s could be related to high levels of student loan debt, which could make it difficult for consumers to afford their bills.
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(Reporting by Jonnelle Marte; Editing by Chizu Nomiyama)