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.
Household debt climbed to $12.58 trillion by the end of 2016, nearly breaking 2008’s record high, the article stated. In fact, if it continues at this rate, household debt could break the high of $12.68 trillion sometime in 2017.
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.