Market Commentary

Household Debt

In the fourth quarter of 2018, household debt rose for the 18th quarter in a row.  It stands at $13.54 trillion as reported by the New York Federal Reserve. At the same time new mortgage debt fell to the lowest level in nearly four years. The refi business was crushed and balances on home-equity loans fell to the lowest level in 14 years.

Auto loans have been the driver of new debt. It was up in 2018 at its highest level in 14 years. Also student loan debt continues to rise and is now at $1.46 trillion. Finally, credit card debt also gained.

These numbers are neither bad nor good, as our economy continues to grow so will debt. It is in the next recession that we will see how good these loans really are. As a reminder we are still working down the bad debts from the last recession.

Leave a Reply

Your email address will not be published. Required fields are marked *