Household debt to hit new record in 2017
Debt in households around the country will hit new record high this year. In fact, according to the report, the debt for 2016 alone was $460 billion. The debt includes mortgages, student loans, car loans, and more. Although it was at $460 billion in 2016, which was the highest in the past ten years, mortgage balances alone right now are at $8.4 trillion. Mortgage balances have made up the highest in household debt by 67 percent.
Total household debt increased significantly in the fourth quarter of 2016, a Federal Bank of New York report showed, according to an article by Ed Adamcyzk for UPI.
From the article:
February’s 33-page “Quarterly Report of Household Debt and Credit” shows that every category of debt measured — including mortgages, credit cards, student loans and auto loans — saw an increase. The total increase of $460 billion in 2016 was the largest in a decade. Mortgage balances, now at $8.48 trillion, made up 67% of the household debt.
Although mortgages make up most of the total household debt, student loans now make up 10% of the total, auto loans make up 9% and credit cards make up 6%. This rising debt shows that banks are opening the credit box, and extending more credit to households.
In fact, the most recent Origination Insight Report from Ellie Mae shows the average FICO score for homebuyers dropped in December by seven points.
However there is one major difference between the 2016 and 2008 levels – fewer delinquencies. Last year’s report showed 4.8% of debts were delinquent or late, compared to 8.5% of total household debt in 2008. Household debt will hit new record in 2017 | 2017-02-20 | HousingWire