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How Much Do You Owe? Household Debt Reaches New High

How Much Do You Owe? Household Debt Reaches New High

The Q2 total of $12.84 trillion in debt topped the previous high of $12.68 trillion in the third quarter of 2008.

Americans are back in the habit of borrowing lots of money.

Total U.S. household debt hit a record $12.84 trillion in the second quarter, fueled by increases in mortgages, auto loans and credit card debt, the Federal Reserve Bank of New York said Tuesday.

It was the 12th consecutive quarterly increase in household debt.

After the recession, Americans shed debt and total household debt reached a low of $11.1 trillion in the second quarter of 2013. But since then, people have began loading up on debt again.

The Q2 total of $12.84 trillion in debt topped the previous high of $12.68 trillion in the third quarter of 2008.

Here are some highlights of the New York Fed’s report:

Housing Debt

There was $421 billion in newly originated mortgages this quarter.

Mortgage delinquencies improved, with 1.5 percent of mortgage balances 90 or more days delinquent in 2017 Q2.

 Delinquency transition rates for current mortgage balances were unchanged, with 1 percent of current balances transitioning to delinquency. There was an improvement in the transition rate of mortgages in early delinquency, of which 12.8 percent transitioned to 90 or more days delinquent, compared to 18.1 percent in the previous quarter.

 About 85,000 individuals had a new foreclosure notation added to their credit reports between April 1 and June 30. Foreclosures remain low by historical standards.

Student Loans, Credit Cards and Auto Loans

 Outstanding student loan balances were flat, and stood at $1.34 trillion as of June 30, 2017. The second quarter typically witnesses slow or no growth in student loan balances due to the academic cycle.

11.2 percent of aggregate student loan debt was 90 or more days delinquent or in default in 2017 Q2.

 Auto loan balances increased by $23 billion, continuing their six-year trend. Auto loan delinquency rates increased slightly, with 3.9 percent of auto loan balances 90 or more days delinquent on June 30.

 Credit card balances increased by $20 billion, reversing the $15 billion decline seen in the 1st quarter of 2017.

Here’s a summery of the Q2 household debt:

  1. Mortgage: $8.69 trillion
  2. Auto loans: $1.9 trillion
  3. Student loan: $1.34 trillion
  4. Credit cards: $784 billion
  5. Home equity: $452 billion
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Dennis Domrzalski is managing editor of ABQ Free Press. Reach him at dennis@freeabq.com.

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Steve “Mo” Fye is an Instructional Tech in the Culinary Arts program at Central New Mexico Community College and has been known to giggle after making a low-fat, gluten-free, low-cholesterol dish and eating it with a sauce he knows will blow his diet for days.

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