The latest Household Credit and Debt Report from the Federal Reserve Bank of New York reported that American debt rose to $16.9 trillion in the fourth quarter of 2022, meaning it grew $394 billion or 2.4 %.
Credit card balances rose $61 billion to $986 billion, surpassing the pre-pandemic high of $927 billion.
“Credit card balances grew strongly in the fourth quarter, while mortgage and auto loan balances grew at a more moderate pace, reflecting activity consistent with pre-pandemic levels,” Wilbert van said. der Klaauw, economic research adviser at the New York Federal Reserve.
“While record low unemployment has kept consumers’ financial foundations generally strong, stubbornly high prices and rising interest rates may be testing some borrowers’ ability to pay off their debt,” Klaauw added.
Auto loan balances increased $28 billion in the fourth quarter, consistent with the upward trajectory seen since 2011.
Student loan balances increased to $1.60 billion, $21 billion more than the prior quarter. In total, non-housing balances grew by $126 billion.
Mortgage originations, which include refinances, fell to $498 billion in the fourth quarter, marking a return to the lowest levels last seen in 2019. While new auto loan volume was $186 billion, which represents a slight increase from the previous quarter.
According to the report, the share of current debt that becomes delinquent rose again in the fourth quarter for nearly all types of debt, following two years of record-low delinquency transitions, where the delinquency transition rate for credit cards and auto loans increased by 0.6% and 0.4%, respectively.
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