Aug 3, 2021 - Economy & Business

America's housing debt balloons

For sale post with arrow pointed up
Illustration: Aïda Amer/Axios

Americans collectively owe over $10 trillion for their homes — and a sizable share of that balance (44%) originated in the past year.

Why it matters: The fresh data point — courtesy of the New York Fed — illustrates the historic mad dash to buy new homes or refinance existing mortgages.

  • The last time the share was bigger was about 15 years ago, on the heels of the mortgage refinancing boom in the early aughts.
Data: New York Fed Consumer Credit Panel/Equifax; Chart: Axios Visuals
Data: New York Fed Consumer Credit Panel/Equifax; Chart: Axios Visuals

It's partly explained by a tidal wave of refinancing. Borrowing costs plummeted to record lows — and homeowners rushed to lower mortgage payments. That shows up as a whole lot of new mortgages.

  • Then there's skyrocketing home prices: The more expensive the home, the higher the dollar amount per borrower.

What they're saying: "The combination of that refi activity and a strong purchase market last year continuing into this year — there's a lot of volume turning over," says Mike Fratantoni, an economist at the Mortgage Bankers Association.

The big picture: Overall household debt rose by the most since 2007, with credit card balances growing for the first time since the pandemic hit.

  • But mortgages continued to be the biggest driver behind the increasing debt pile.
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