U.S. household debt rose to a record $15.84 trillion in the first quarter driven almost entirely by a $250 billion increase in home loan balances, but the rise was the smallest in a year and new mortgage and auto loan originations declined for a third straight quarter, Reuters reported. The Federal Reserve Bank of New York's quarterly household debt report released Tuesday showed mortgage debt climbed to $11.18 trillion at the end of March, and now accounts for 71% of total household debt, the highest share in roughly a decade. But new loan originations — both for home purchases and refinancing of existing mortgages — fell to $859 billion, the lowest since the second quarter of 2020. They remain, however, more than $100 billion above the pre-pandemic level of the fourth quarter of 2019. Still, the 17% drop was the largest in five years and was largely the product of a fall-off in demand for refinancings with borrowing costs climbing rapidly during the quarter as the Fed began hiking interest rates to combat inflation running at four-decade highs.
