Market - - Feb 21,2017
US household debts rose by $226 billion in the last quarter of 2016, bringing it to a total of $12.58 trillion
According to a report by Federal bank of New York, in 2016 household debt increased by $460 billion, the highest one-year increase in about a decade. The figure also represents a $226 billion increase in household debt for the last quarter in 2016, the sharpest quarterly increase since 2013.
Total household debt now is $12.58 trillion, which means that the household debts is now flirting with 2008 levels when the value reached a record high of $12.68 trillion.
The largest share of US household debts comes from mortgages, which consumes about 67 percent of the total US household debts and ended the year 2016 at $8.48 trillion.
However, the rise in non-housing debts, which includes credit card debt, auto debt and student debt are the significant factors responsible for the rebound in debts.
Student loan debt increased by $31 billion in the last quarter of 2016, to a total of about $1.31 trillion and accounts for about 10 percent of all household debt. Auto loans increased by $22 billion to reach a record high and are about 9 percent of all the household debt. Credit card debts increased by $32 billion to reach $779 billion and are about 6 percent of all the household debt.
While the above figures may sound disturbing, but the matter is not as serious as it was in 2008. Fewer delinquencies show the positive side of 2016, at the end of the year, only 4.8% of all household debts were offending as compared to 8.5% of all household debts in 2008.