Household debt ticks up in third quarter 2022

Total household debt rose by $351 billion, or 2.2%, to reach $16.51 billion in the third quarter of 2022, the Federal Reserve Bank of New York reported today. Mortgage balances—the largest component of household debt—rose by $282 billion and stood at $11.67 trillion at the end of September, representing a $1 trillion increase from the previous year.

Mortgage originations, which include refinances, stood at $633 billion in Q3, representing a $126 billion decline from Q2 and a return to pre-pandemic volumes, according to the New York Fed. Auto loan balances increased by $22 billion. The volume of newly originated auto loans was $185 billion, a slight reduction from the previous quarter but still elevated compared to the average volumes seen through the 2018-2019 period. Credit card balances increased by $38 billion, or 15% year over year, which was the largest increase in more than two decades. Aggregate limits on credit card accounts increased by $82 billion and now stand at $4.3 trillion.

“Credit card, mortgage and auto loan balances continued to increase in the third quarter of 2022 reflecting a combination of robust consumer demand and higher prices,” said Donghoon Lee, economic research advisor at the New York Fed. “However, new mortgage originations have slowed to pre-pandemic levels amid rising interest rates.”