Americans have $12.58 trillion of debt - here's what it looks like
Bloomberg via Getty Images/Scott Eells
Household debt totaled $12.58 trillion as of December 31, 2016, according to the New York Fed's latest quarterly report on credit.
Total debt increased by 1.8%, or $226 billion, in Q4. That lifted household debt just 0.8% below the peak reached in the third quarter of 2008 as the US economy was mired in recession.
According to the report, Americans borrowed the most money since the recession to pay for new houses or to refinance their mortgages. Mortgage originations in the fourth quarter totaled $617 billion.
Last year saw a sharp rise in new auto loans, helping carmakers post a record period of sales. In the fourth quarter, auto loan originations - appearances of new auto balances on consumer credit reports - increased by a record $142 billion.
A greater share of mortgages and auto loans was granted to higher-quality borrowers. About 58% of all new mortgages in 2016 were approved for people with credit scores above 760. That was up from an average of 54% in 2015.
"The question from a macro perspective then becomes if the low-quality borrowers as a group are big enough to slow down the overall economic expansion," said Torsten Slok, Deutsche Bank's chief international economist, in a note on Friday. "So far banks have responded with a tightening in lending standards."
Outstanding student loans - the largest source of debt besides mortgages - increased by $31 billion to $1.31 trillion.
Delinquency rates were "roughly stable" in Q4, the New York Fed said, although late payments on car loans rose to a post-recession high.
- Some Tesla factory workers realized they were laid off when security scanned their badges and sent them back on shuttles, sources say
- I tutor the children of some of Dubai's richest people. One of them paid me $3,000 to do his homework.
- India not benefiting from democratic dividend; young have a Kohli mentality, says Raghuram Rajan
- Indo-Gangetic Plains, home to half the Indian population, to soon become hotspot of extreme climate events: study
- 7 Vegetables you shouldn’t peel before eating to get the most nutrients
- Gut check: 10 High-fiber foods to add to your diet to support digestive balance
- 10 Foods that can harm Your bone and joint health
- 6 Lesser-known places to visit near Mussoorie