US household debt soared to nearly $15 trillion last quarter—largest amount on record

American consumers held $14.96 trillion in debt at the end of June this year — the largest amount on record and $812 billion more than what was owed at the end of 2019, before the pandemic hit.

A surge in credit card spending and home purchases caused US household debt to increase by $313 billion, or 2.1%, in the second quarter of this year, according to the Federal Reserve Bank of New York. That is the biggest nominal jump since 2007 and the biggest percentage increase in 7 years. 

Credit card balances rose by $17 billion in the second quarter, but they still remain $140 billion below levels at the end of 2019. Auto loan balances increased by $33 billion. In total, medical debt is $140 billion. Student loan debt, which is the only category of debt that declined, declined to $14 billion. Student loans are still mostly covered by the CARES Act.

Mortgage dent rose $282 billion to $10.44 trillion, 44% of the outstanding balances originated last year, accounting for both new mortgages and refinancings. Even though the US housing market is hot and borrowing to purchase homes is very high, “there are still 2 million borrowers in mortgage forbearance who are vulnerable to financial distress once the forbearance programs come to an end,” said Joelle Scally administrator of the Center of Microeconomic Data at the New York Fed.



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