Total debt held by US households surged in 2017 to more than $13 trillion, the fifth straight annual increase, amid a continued rise in home mortgages and auto loans, according to data released Tuesday.
But nearly 10 years after the start of the global financial crisis, the hangover from the US housing market collapse is still evident in some areas of the country, the New York Federal Reserve Bank said in its quarterly report.
Total credit and debt jumped by $572 billion, nearly all of that or $402 billion, was due to the increase in mortgages as buyers continue to come off the sidelines to purchase homes and prices recover.
Student loan balances, auto loans and credit card debt all increased as well, while home equity lines of credit were the sole category to show a decline, the report said.
Delinquency rates for debt more than 90 days past due continued to improve for most categories, or at worst remain steady, while foreclosures remained at record low levels, the data showed.
While total household debt last year surpassed the peak hit in the third quarter of 2008, just before the start of the crisis, mortgage balances remain more than four percent below the peak.
However, state level data show wide differences with those areas hardest hit by the housing bubble still seeing lasting effects.
‘Despite recovered house prices, mortgage balances remain far below their previous peaks in the states that were hardest-hit by the Great Recession,’ said Donghoon Lee, research officer at the New York Fed.
There are eight states with mortgage balances at least 10 percent below their earlier peak, and most, including Florida, Arizona, Nevada, and California ‘were severely impacted during the Great Recession,’ New York Fed researchers said in a blog post about the underlying data.
But some states, such as Texas, Colorado, North Dakota, and Delaware, have balances more than 10 percent above their previous peak, they said, since they did not suffer the severe housing collapse.
‘Echoes of the Great Recession are clearly visible’ and ‘well aligned with the state-level variation of the housing boom and bust cycle.’