(ZeroHedge) While it does not contain any new information to those who track the monthly, G.19, consumer credit releases by the Fed, the quarterly NY Fed report on Household Debt and Credit Developments provides a convenient one-stop summary of quarterly changes in household finances. What the latest report issued this morning revealed, is that total US household debt jumped in Q4 driven by increases in credit card debt, auto and student loans, and a Q4 surge in mortgage originations, and as of December 31, 2016, stood at $12.58 trillion, a $226 billion (1.8%) increase from the third quarter of 2016. For the full year 2016, total household debt rose by $460 billion, the biggest annual increase in a decade.
Total household debt has risen by 12.8% from its Q2 2013 trough, and is just $99 billion, or 0.8%, shy of its all-time peak of $12.7 trillion set in Q3 2008 just as the financial crisis was starting. At this rate household debt will set a new all time high some time in the first quarter. When measured as a percentage of GDP, total household borrowing today is 67% of nominal gross domestic product, compared with about 85% in 2008.
Mortgage balances, the largest component of household debt, increased during the fourth quarter by $130 billion, and stood at $8.48 trillion at December 31. Additionally, all types of non-housing debt balances grew in the fourth quarter, with a $22 billion increase in auto loan balances, $32 billion increase in credit card balances, and $31 billion increase in student loan balances.
According to Wilbert van der Klaauw, an economist at the New York Fed, “debt held by Americans is approaching its previous peak, yet its composition today is vastly different as the growth in balances has been driven by non-housing debt.”
The average household debt composition in a select group of states and the US in general, is shown in the chart below. As usual, California leads the pack….