Illustration: Sara Grillo
Household debt increased by more than $600 billion last year, topping $14 trillion for the first time and marking the largest one-year jump since 2007, new data from the New York Fed show.
Why now? The growth was driven mainly by a large increase in mortgage debt balances, which rose by $433 billion.
Between the lines: More young people are taking on credit cards, and there has been an increase in delinquencies since 2016, "notably among younger borrowers,” Wilbert Van Der Klaauw, SVP at the New York Fed, said in a statement.
- About 41% of eligible Gen Zers (those born in the mid-1990s or later) had a credit card last year, compared to 34% of millennials reaching the same age in 2012, according to a new survey from TransUnion, per Bloomberg.
- The average 24-year-old last year, owed about $2,000 on credit cards, about one-third more than millennials at that age in 2012, the study found.
But, but, but: While total household debt has risen, the level of household debt service as a percentage of disposable income has fallen to an all-time low, according to St. Louis Fed data.