Household debt climbed in the second quarter of 2021, according to NY Fed’s Quarterly Report on Household Debt and Credit… (New York Federal Reserve)
- Household debt increased 2.1% to $14.96 trillion in the second quarter of 2021. The total debt balance is now
- This was the largest quarter-over-quarter increase since Q4 2013.
However, it is important to remember that not all debt is created equal. While credit card debt did increase almost all the debt was housing debt…
- Mortgage balances made up 90% ($282 billion) of the increase. Total mortgage debt is now $10.44 trillion at the end of June.
- Credit card use was responsible for just 5.4% ($17 billion) of the increase in the second quarter. Even with this increase, credit card balances were still $140 billion lower than they had been at the end of 2019.
NOTE: Auto loans increased by $33 billion, while student loan balances decreased by $14 billion.
All in all, this was a pretty great report. Sure, in a perfect world there would be no household debt. However, in the real world if you are going to have debt borrowing at, or around, 3% is as good as it gets. And just to add to the good news, the report also finds that 71% of me household debt went to borrowers with credit scores over 760.