Household indebtedness will increase by $ 601 billion to $ 14TRILLION in 2019 – the largest increase in 12 years
Household indebtedness increases by $ 601 billion to $ 14TRILLION in 2019 – the largest increase in more than a decade as mortgage loans and credit card spending increase
- Borrowing by American households reached a record high of $ 14.15 trillion
- The $ 601 billion increase is the largest annual increase in 12 years
- Mortgage loans are responsible for most of the total total level of household debts, as property buyers continue to benefit from low interest rates
- Fed issues a warning because young people are struggling to sustain their payments, with 4.3 percent of credit card holders between 18 and 29 in 2019 overdue
Borrowing by US households increased by $ 601 billion in 2019, the largest increase since the year prior to the financial crash 12 years ago.
Spending increased in various areas – but fears have arisen about the number of young people struggling to keep up with credit card reimbursements.
The record high of $ 14.15 trillion marks the highest level of household debt since the 2008 crash and the largest annual profit since the start in 2007 when there was an increase of just over $ 1 trillion, new figures revealed by the Federal Reserve Bank.
The record high of $ 14.15 trillion in US household debts marks the highest level of the 2008 financial crash and the largest annual profit since the year prior to the 2007
Spending increased in various areas and fears have been raised about the number of young people struggling to keep up with credit card reimbursement
Last year’s growth was fueled by home buyers using the low interest rates, according to the report published Tuesday, with mortgage balances rising by $ 433 billion from the fourth quarter of 2018 to $ 9.56 billion.
The jump meant that new home loans have reached the highest volume since the fourth quarter of 2005.
Credit card borrowing increased by $ 57 billion when the Fed in New York warned that borrowers were falling behind in their payments.
Young people have a credit card disproportionately more often as their main form of debt, the Fed warned
About 4.3 percent of credit card holders between 18 and 29 years old were delinquent in 2019, while the rate was 2.8 percent for people between 30 and 39 years old, the report said.
“Younger borrowers, who disproportionately have credit cards and student loans as their primary form of debt, struggle more than others with timely repayment,” said New York Fed researchers.
The student loans increased by $ 51 billion to $ 1.51 trillion, of which 9.21 percent matured by 90 days or more. According to the Fed, the car loan debt reached $ 57 billion.
The number of people declared bankrupt increased from 195,000 in 2018 to 202,000.
The Federal Reserve lowered borrowing rates three times last year to try to support economic growth, with the latest cut in October to 1.5-1.75 percent, which continued to bring home buyers on the market.