U.S. debt — including mortgages, student loan, auto debt, credit cad debt — jumped to $15.58 billion in 2021.
Inflation may be reviving Americans’ old spending habits as credit card spending increased every quarter in 2021 to end the year at $856 billion, the Federal Reserve Bank of New York, said Tuesday.
Credit card bills in the fourth quarter increased by $52 billion, the largest quarterly increase in the 22 years the FRBNY has been keeping track of the data.
Total U.S. household debt rose by $333 billion in the fourth quarter to $15.58 trillion, according to the data. Debt balances — which include mortgage, credit card, auto debt and student loans — grew by $1 trillion.
“The total increase in nominal debt during 2021 was the largest we have seen since 2007,” said Wilbert Van Der Klaauw, senior vice president at the New York Fed.
“The aggregate balances of newly opened mortgage and auto loans sharply increased in 2021, corresponding to increases in home and car prices.”
Despite the sharp increases, credit card balances remain $71 billion lower than at the end of 2019, before the pandemic started.
New extensions of installment credit were at historically high volumes in 2021 for both mortgages and auto loans.
Meanwhile, the mortgage market saw a $1.03 trillion increase in newly originated debt in the quarter with 67% of that amount originated to borrowers with high credit scores (over 760).
Outstanding student loan debt decreased by $8 billion from the third quarter to $1.58 trillion.
Student loan debt was the only household debt to decline in the quarter while mortgage debt saw the biggest jump at $258 billion. About two-thirds of the total debt total in the U.S. comes from mortgage debt.
