US household debt accelerated at the fastest annual pace since 2008 in the third quarter of 2022. Credit-card balances soared despite a multi-decade high of interest rates that lenders charge consumers.
According to the data released by the Federal Reserve Bank of New York, households added $351 billion in overall debt in the third quarter, representing an increase of 8.3% from the same period of last year, the fastest pace since a 9.1% rise in the first quarter of 2008. The figure reported on Tuesday had taken the total to $16.5 trillion.
The data from the Federal Reserve Bank of New York indicated that most of the latest increase came in mortgage debt, which is the biggest liability on household balance sheets by far. Mortgage debt rose by $282 billion last quarter and by $1 trillion from a year earlier, to $11.7 trillion.
In addition, mortgage and home-equity debt combined are up by $2 trillion since the Covid-19 pandemic began.
Meanwhile, credit-card debt also jumped by the most in 20 years, with balances rising by 15% from a year earlier.