Household debt tops $16 trillion as inflation surges and rates rise

Household debt climbed past $16 trillion in the second quarter for the first time, as soaring inflation pushed up housing and auto balances, the New York Federal Reserve reported Tuesday.

The collective American IOU totaled $16.15 trillion through the end of June, good for a $312 billion or 2% increase from the previous quarter. Debt gains were widespread but particularly focused on mortgages and vehicle purchases.

Americans are borrowing more, but a big part of the increased borrowing is attributable to higher prices, the New York Fed said in a blog post accompanying the release.

Mortgage balances rose 1.9% for the quarter, or $207 billion, to about $11.4 trillion, even though the pace of originations moved lower. That annual increase marked a 9.1% gain from a year ago as home prices exploded during the pandemic era.

via www.cnbc.com