US household debt climbs above $15T for first time

By Ovunc Kutlu

ANKARA (AA) - US household debt climbed to a record of more than $15 trillion for the first time, according to a report by the Federal Reserve Bank of New York.

Total household debt increased by $286 billion, or 1.9%, to $15.24 trillion in the third quarter, compared to the previous quarter, the New York Fed's Quarterly Report on Household Debt and Credit showed late Tuesday.

While the record is $890 billion higher than the third quarter of 2020, it is $2.57 trillion higher than the $12.68 trillion peak that was recorded in 2008, it added.

Mortgage balances, the largest component of household debt, rose by $230 billion to $10.67 trillion at the end of September. There was $1.11 trillion in newly originated mortgage debt in the July-September period.

While credit card balances increased by $17 billion, auto loan balances jumped by $28 billion and student loan balances grew by $14 billion.

"As pandemic relief efforts wind down, we are beginning to see the reversal of some of the credit card balance trends seen during the pandemic, namely reduced consumption and the paying down of balances," said Donghoon Lee, research officer at the New York Fed.

"At the same time, as pandemic restrictions are lifted and consumption normalizes, credit card usage and balances are resuming their pre-pandemic trends, although from lower levels," he added.