Household debt rose in the second quarter of this year as consumers took out more loans in several markets, according to the Federal Reserve Bank of New York.
“The second quarter of 2022 showed strong increases in mortgage, auto loan and credit card balances, in part due to rising prices,” said Joelle Scally, New York Fed Administrator of the Center for Microeconomic Data, in a press release. “While household balance sheets appear to be in good shape overall, we are seeing an increase in delinquencies among risky and low-income borrowers with rates approaching pre-pandemic levels.”
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This is the type of debt Americans added in the second quarter
The report showed that Americans borrow money in a variety of ways, such as through home loans, car loans, credit cards and personal loans. Here’s a look at where Americans are getting into debt:
Mortgage debt increased by $207 billion in the second quarter, reaching a total of $11.39 trillion. This came as home prices jumped near record highs over the same period. Single-family home prices rose 19.4% annually in the second quarter of 2022, according to the latest Fannie Mae Housing Price Index (HPI). And as house prices rose, homebuyers took out higher mortgages in order to afford their new home.
Additionally, mortgage lending fell slightly to $758 billion in the second quarter in a context of rising mortgage ratesindicates the report.
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Auto loan debt increased by $33 billion in the second quarter, with the volume of new auto loans reaching $199 billion, according to the report. This continued the high volume of auto creations that has occurred since the third quarter of 2020. Used cars are also costing consumers $10,000 more than usual in June, a 45% increase compared to the previous year.
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Credit card balances increased by $46 billion in the second quarter. And while credit card balances typically see an increase this time of year, they jumped 13% from the second quarter of 2021, making it the biggest increase in more than 20 years, according to The report. Additionally, global credit card account limits have increased by $100 billion and now stand at $4.22 trillion – the largest increase in more than a decade.
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Other loan balances
Other loan balances either rose or were flat during the second quarter, according to the New York Fed report. Student loan balances were roughly unchanged from the first quarter at $1.59 trillion. Personal and other consumer loans increased by $25 billion. And non-housing balances rose $103 billion in the second quarter, the biggest increase since 2016.
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