Total household debt has climbed for the 20th consecutive quarter, with mortgage balances surpassing their peak in 2008.
Overall, household debt grew $192 billion (1.4%) to $13.86 trillion in the second quarter of 2019, according to the Federal Reserve Bank of New York's Quarterly Report on Household Debt and Credit. The increase brought household debt $1.2 trillion higher than the previous record of $12.68 trillion in Q3 2008.
The report also showed that mortgage credit, which is the largest component of household debt, increased $162 billion to $9.4 trillion. In the third quarter of 2008, mortgage balances were $9.3 trillion in total.
“While nominal mortgage balances are now slightly above the previous peak seen in the third quarter of 2008, mortgage delinquencies and the average credit profile of mortgage borrowers have continued to improve,” said Wilbert van der Klaauw, senior vice president at the New York Fed.
In addition, mortgage originations and refinances also moved up $130 billion to $474 billion last quarter. The increase marked the highest volume seen since Q3 2017.
“The data suggest a more nuanced picture for other forms of household debt, with credit card delinquency rates continuing to rise," van der Klaauw said.
Even with the surge of mortgages, delinquencies continued to improve with 0.9% of mortgage balances 90 or more days delinquent, inching down from 1% in Q1 2019.
The report also observed that transitions from early delinquency showed improvements as well, as 10.5% of mortgages in early delinquency (30 to 60 days late) became 90 or more days delinquent. This was the lowest rate seen since 2005. Meanwhile, the percentage of cured mortgages in early delinquency was 43%.