U.S. mortgage debt reached a record in the second quarter, exceeding its 2008 peak as the financial crisis unfolded, the Wall Street Journal reported. Mortgage balances rose by $162 billion in the second quarter to $9.406 trillion, surpassing the high of $9.294 trillion in the third quarter of 2008, the Federal Reserve Bank of New York said yesterday. Mortgages are the largest component of household debt. Mortgage originations, which include refinancings, increased by $130 billion to $474 billion in the second quarter. The figures are nominal, meaning they aren’t adjusted for inflation. The milestone for mortgage debt has been long in the making. Americans’ mortgage debt dropped by about 15 percent from the 2008 peak to the trough in the second quarter of 2013 and has climbed slowly since then. Total household debt has been on the rise since mid-2013. It rose by 1.4 percent from the first quarter to $13.86 trillion, the 20th consecutive quarter of increase. Mortgages remain the largest form of household borrowing but have become a smaller share of total debt since the late 2000s as consumers take on more automotive and student loans. Despite the higher debt loads, Americans appear to be keeping up with their payments. The report found that 95.6 percent of balances were current, the highest level of the current expansion. Read more. (Subscription required.)
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