Household Debt Levels See Biggest Jump in 14 Years

August 3, 2021

Household debt saw its biggest increase in 14 years during the second quarter, driven largely by a surge in the housing market. Debt jumped $313 billion in the period between April and June, the largest dollar amount since 2007. This brings the nation’s total household debt level to just shy of $15 trillion. As a share of debt, that is a 2.1% increase, the highest level since 2013.

The majority of this increase comes from mortgage originations for both new purchases and refinances, which have been booming amid historically low interest rates. Mortgage balances increased by $282 billion during the quarter, up 6.7% from the same period last year. Over the last four quarters, mortgage originations have totaled nearly $4.6 trillion, which accounts for nearly 44% of all outstanding mortgage debt.

Non-housing debt, which includes things like credit cards and car loans, increased by $44 billion during the quarter. Student loan debt actually decreased slightly, falling $14 billion to $1.57 trillion amid pandemic-related forbearance programs.

For the most part, Americans have been able to manage their debt. During the second quarter, just 2.7% of household debt was in delinquency, down 2 percentage points from the fourth quarter of 2019, just before the pandemic hit. Much of this is likely due to pandemic relief efforts and forbearance programs, and many analysts worry that when these programs end, many Americans may find themselves unable to catch up on payments.

Read all Blog posts