Overall, U.S. household debt jumped by $226 billion, or 1.8 percent, in the fourth quarter, led by a $130 billion increase in mortgage loan balances and a $32 billion increase in credit card balances, the Federal Reserve Bank of New York reports.
Borrowing increased in the fourth quarter at the fastest pace in three years, the New York Fed said.
That brings the rise in total consumer credit debt to $12.58 trillion, just under the $12.68 trillion peak in the third quarter of 2008.
There is a difference between the run-up in household debt leading up to the financial crisis of 2007-2009 and this current buildup over the past three years, which is being fueled by student debt and auto loans.
“Debt held by Americans is approaching its previous peak, yet its composition today is vastly different as the growth in balances has been driven by non-housing debt,” said Wilbert van der Klaauw, senior vice president at the New York Fed. “Since reaching a trough in mid-2013, the rebound in household debt has been led by student debt and auto debt, with only sluggish growth in mortgage debt.”
New mortgages issued totaled $617 billion, representing the biggest three months for volumes since the third quarter of 2007.
Balances increased across all debt products in the fourth quarter, with a 1.6 percent increase in mortgage balances, a 1.9 percent increase in auto loan balances, a 4.3 percent increase in credit card balances, and a 2.4 percent increase in student loan balances.