By Ovunc Kutlu
ANKARA (AA) - US household debt climbed to almost $15 trillion in the second quarter, the largest increase in 14 years, according to the New York Federal Reserve on Tuesday.
Total household debt balances rose $313 billion, or 2.1%, from the first quarter to $14.96 trillion, the New York Fed said in its Quarterly Report on Household Debt and Credit.
"The 2.1% increase in aggregate balances was the largest seen since 2013Q4 and marked the largest nominal increase in debt balances since 2007Q2," it said.
Total debt balance is now $812 billion higher than at the end of 2019, it noted.
Mortgage balances, which is the biggest component of household debt, rose $282 billion to $10.44 trillion at the end of June. Auto loans increased $33 billion to $1.42 trillion.
Credit card balances grew $17 billion to $790 billion but student loan balances declined $14 billion to $1.57 trillion.
"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. "However, there are still two million borrowers in mortgage forbearance who are vulnerable to financial distress once the forbearance programs come to an end."
The increase in household debt comes amid rising home prices and inflation after the government injected trillions of dollars into the economy during the coronavirus pandemic early last year.
With widespread vaccinations and rapid normalization, Americans have quickly returned to pre-pandemic consumption behavior, which pushed credit card debt higher.