The Strategist

Americans owe $ 13 trillion in loans


02/14/2018 - 14:28



The Federal Reserve Bank of New York (FRB) said that the total debt of American households reached a record level of $ 13.15 trillion. More than half ($ 8.9 trillion) of this amount was mortgage debt. Despite the growth of total debt, the share of overdue loans decreased.



On Tuesday evening, the Federal Reserve Bank of New York published data on the current state of the debt of American households in 2017. According to the data, for the last quarter of the year this volume grew by 1.5% ($ 193 billion) and reached a record level of $ 13.15 trillion. The increase in consumer indebtedness was noted for all major segments (mortgage, educational loans, car loans, credit card debts, retail loans), except for credit lines secured by real estate.

The mortgage debt grew in the fourth quarter by $ 139 billion, and for a year - by $ 402 billion. Educational loans totaling $ 1.38 trillion are on the second place, and the third is taken by debt on credit cards ($ 834 billion).

Despite the increase in total household debt, the share of overdue loans - with a delay of 90 days or more - generally remains stable, and is even declining in some categories. The share of overdue mortgage loans in the fourth quarter was 1.1%, while in the third quarter this amount was a little higher, 1.2%. The share of overdue educational loans (9.3%) also decreased in the fourth quarter - by 0.3% compared with the third quarter. In general, the share of overdue loans for all types of debt in the fourth quarter was 2.3%, while in the third quarter the number was 2.4%.

"Despite the recovery in real estate prices, mortgage debt still remains below previous peak periods in those states that suffered most during the recession," said a New York Fed's analyst. "And although the lower amounts of mortgage debt in these states regions can not necessarily be interpreted as a negative factor, the differences in the indicators of different regions clearly show that we still feel the echoes of the financial crisis."

source: cnn.com




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