By Jeff Cox -
CNBC
US household debt increased during the third quarter of the year at the fastest rate in the last 15 years, due to increased use of credit cards and high mortgages, the Federal Reserve reported Tuesday.
Household debt increased by a total of $351 billion between July and September, the largest quarterly increase since 2007. That number brings the debt of all US households to
a new record
of $16.5 trillion.
This is a jump of 8.3% compared to a year ago.
Debt has skyrocketed in the last year due to runaway inflation not seen in more than 40 years.
The rise in interest rates and strong consumer demand have also played a role.
US household debt rose during the third quarter of the year at the fastest rate in 15 years NurPhoto via Getty Images
The factors that contributed the most to the increase in household debt were high mortgages —which added $1 billion in just one year, to reach $11.7 billion— and credit card debt, which rose to $930 billion. .
Household credit card balances rose more than 15%
from the same quarter in 2021, the biggest annual jump in more than 20 years, the Fed said.
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“Credit card, mortgage and auto loan balances continued to rise in the third quarter of 2022, reflecting a combination of strong consumer demand coupled with higher prices,” said Donghoon Lee, economic research adviser to the New York Fed.
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Researchers at the New York Fed attributed the growth in credit card debt to "very strong" consumption, rising prices, and consumers' little use of funds in their savings accounts.
Along with the increase in card debt, late payments have increased.
However, while
"delinquency rates are increasing
, they remain low compared to historical standards and suggest that consumers are managing to manage their finances during the period of rising prices," the researchers wrote.
The Federal Reserve also said in its report that auto loan balances rose to $1.52 billion, while student loan debt decreased to $1.57 billion.
This last figure is the lowest since the second quarter of 2021, amid the efforts of the Biden Administration to forgive thousands of dollars for this concept.
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Auto loan debt, while up slightly on a quarterly basis, is up 5.6% from a year ago.
Mortgage balances continued to climb amid a sharp rise in interest, which reached 7% for 30-year fixed mortgages.
Total debt rose even as home purchases fell sharply, down almost 17%.
Home repossessions (
foreclosures
) remained at a low level, even after the pandemic moratorium on evictions expired.
