Most of us have been feeling the pinch on our wallets due to inflation, but it may be worse than we thought.
According to a CNBC report, household debt increased during the third quarter at the fastest pace in 15 years per the Federal Reserve.
Debt spiked to $351 billion from July to September, the largest quarterly increase since 2007. This brings the collective US household debt to $16.5 trillion.
“Credit card, mortgage, and auto loan balances continued to increase in the third quarter of 2022 reflecting a combination of robust consumer demand and higher prices,” said Donghoon Lee in an interview with CNBC. Lee, who is an economic research advisor at the New York Fed continued: “However, new mortgage originations have slowed to pre-pandemic levels amid rising interest rates.”
Payment delinquencies are also at an all-time high.
However, while “delinquency rates are rising, they remain low by historical standards and suggest consumers are managing their finances through the period of increasing prices,” New York Fed researchers wrote in a report.
Mortgage balances are also creeping higher as well. The Federal Reserve reported that 30-year mortgage loan rates sit at 7%, which is a 3% jump from just over 4% since 2018.
The report also spotlighted student loan balances, which hovers at $1.57 trillion. CNBC pointed out that student loan debt is the lowest since the second quarter of 2021 as the Biden administration fights to implement forgiveness measures.