Total household debt in the U.S. saw a modest increase in the second quarter of 2024, rising to a new high of $17.80 trillion. This 0.6% rise from the previous quarter marks the smallest quarterly increase since Q2 2023, according to the New York Federal Reserve.
Breaking It Down: The $109 billion in new debt accumulated during the quarter was primarily driven by mortgage debt, which accounted for 64.7% ($77 billion) of the increase. Credit card debt made up 22.6% ($27 billion), auto loans represented 8.4% ($10 billion), and retail cards and other loans contributed just 0.8% ($1 billion). Notably, student loans decreased by $10 billion in the second quarter.
- Since the end of 2019, total household debt has surged by 26.2%, or $3.7 trillion.
- Positive news: 70.3% of the outstanding debt is mortgage debt, with an additional 2.1% backed by home equity through home equity lines of credit (HELOCs).
Mortgage Debt: Newly originated mortgage debt reached $374 billion in Q2 2024, with 63% of this new mortgage debt going to individuals with a credit score above 760. The age group 30-39 accounted for the highest share of new originations at 31.9%, followed by the 40-49 age group at 23%.
Bottom Line: The modest rise in household debt and the significant share of mortgage debt suggest that consumers remain cautious in their borrowing as the economy begins to slow. As the year progresses, economists and policymakers will be closely monitoring these trends to gauge the overall health of consumer finances and the potential impacts on the broader economy.