U.S. Mortgage Debt Hits Record, Eclipsing 2008 Peak
NEW YORK – A new report from the Federal Reserve Bank of New York reveals that mortgage balances rose by $162 billion in the second quarter to a record $9.406 trillion, exceeding the high of $9.294 trillion in the third quarter of 2008 at the peak of the financial crisis.
Mortgage originations, including refinancings, edged up by $130 billion to $474 billion, not adjusted for inflation.
Mortgage debt slipped about 15% from the 2008 peak to the second quarter of 2013 and has been slowly increasing since then. Total household debt climbed 1.4% from the first quarter to $13.86 trillion in the second quarter, marking the 20th straight quarterly gain.
“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.
The increase in mortgage debt balances could be related to homeowners tapping into their equity when they refinance.
Source: Wall Street Journal (08/13/19) Torry, Harriet
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