Consumer debt increased across all categories to a total of $16.9 trillion, which is $1.3 trillion greater than a year ago. Mortgage balances alone increased by $1 trillion from last year despite the drop off in originations. The mortgage loans in "serious delinquency" almost doubled from a year ago. While auto loan delinquencies increased by 0.6 percent and credit card delinquencies rose by 0.8 percent, to a total of 4 percent. According to an economic research advisor for the New York Fed, credit card balances are growing more heavily than mortgages and auto loans, which reflects the pre-pandemic levels. Although low unemployment rates usually mean a strong financial situation for consumers the high prices and interest rates have been making it difficult for people to repay their debts.
4 comments:
Overall, great post! This is very concerning to see, given that a lot of us have recently gotten credit cards to build credit for after graduation. I would be very curious to see what age range the delinquent credit cards are most prominent in! I personally believe that a lot of this would be in younger generations because most 20 years old that I know don't fully understand how credit works.
Hello Jaret,
High consumer prices and debt are significant issues in today's economy. As you mentioned, almost every category of consumer debt has increased significantly in the last few years. The pandemic is currently showing its reproductions and will likely continue for a few more years until monetary and fiscal policies are able to level the economy back out. Policies such as high-Interest rate hikes are used to combat inflation in the hopes of an increase in consumer spending. However, the main reason Americans are in large debt today is due to the large increase in the money supply in 2020, 2021, and part of 2022.
Overall, this is informative! Well done.
Given the current state of the economy, I think it is very concerning for consumer debt to rise by such a high amount. I think we can attribute this to continued high consumer spending during times of interest rate hikes. I think that most consumers over spent during the pandemic and we are currently seeing the impact.
Great post discussing the threat of consumer debt in our economy right now. I wonder why we have seen credit card balances growing more than mortgages and auto loans recently
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