Household Debt Increases to $12 Trillion

[rangerrebew]

 Household Debt Increases to $12 Trillion
Posted By Ali Meyer On February 23, 2016 @ 4:58 am In Issues | No Comments

Household debt increased by $51 billion in the fourth quarter of 2015, and now totals $12.12 trillion, or more than $40,000 per household, according to a report from the Federal Reserve Bank of New York.

This level of debt is 4.4 percent shy of the record-high household debt of $12.68 trillion seen in 2008.

Mortgage debt represents the largest share of overall household debt. In the fourth quarter of 2015, however, most of the growth of the $51 billion increase came from student loan debt.

The majority of the $12 trillion in household debt comes from mortgage debt, which totaled $8.25 trillion in the fourth quarter of 2015.

Student loans were the next largest contributor at $1.23 trillion, followed by auto loans at $1.06 trillion, then credit card debt at $733 billion, and finally home equity lines of credit at $487 billion.

While mortgage balances contribute to 68 percent of the $12.12 trillion in total household debt, they declined by $11 billion in the fourth quarter of 2015.

Student loan debt was the biggest driver of growth in household debt, increasing by $29 billion in the fourth quarter of 2015. Of the student loan debt incurred in the last three months of 2015, 11.5 percent was 90 days past due or in default.

The remainder of the debt increase seen in the fourth quarter came from credit card debt and auto-loan debt, which contributed $19 billion each.

“Non-housing debt balances have been rising, but the same cannot be said for mortgages,” said Andrew Haughwout, senior vice president at the New York Fed. “Mortgages are being paid down faster, helping to offset the generally rising volume of originations.”

According to the New York Fed, debt per capita in the United States exceeds $40,000 per household. Of the states the report reviewed, California, New Jersey, New York, Nevada and Arizona had higher household debt per capita than the nation’s average, while Texas, Florida Ohio, Pennsylvania, Illinois and Florida had a lower household debt per capita than the U.S. average.

Article printed from Washington Free Beacon: http://freebeacon.com

URL to article: http://freebeacon.com/issues/household-debt-increases-to-12-trillion/

[Relic]

My tax software tells me I'm in the upper X% of earners. I live very modestly, my car is 8 years old, my wife's is a 2014, but that's because her other car was rotting. One vacation a year, for a week, to the beach. Simple home, not a lot of toys. And now, I'm working my tail off so my mortgage is paid and I can retire. I have concerns about retirement income, but I am not too pessimistic.

Now, if I'm in the upper X%, and I see all these McMansions with the Escalades and X3s in the driveway, I wonder how these people do it. I wonder where they get the money. I guess this is one answer? They borrow it.