Household Debt Increases for First Time in Over Three Years

November 12, 2012 (Chris Moore)

Total outstanding household debt rose for the first time in 14 quarters during the second quarter of 2012 as Americans continued to take on more consumer debt while still shedding their home mortgage debt according to the Federal Reserve’s latest Flow of Funds Report.

Total outstanding household debt increased from a revised $12,905.7 billion in the first quarter of 2012 to $12,945.1 billion in the second quarter, a gain of 39.4 billion. It was the first time in 14 quarters that total household debt has increased. Total debt peaked in the second quarter of 2008 at $13,809.0 billion and has been on a steady decline ever since.

The increase in debt was led by a $39.6 billion surge in consumer debt, the seventh consecutive quarter that Americans have increased their consumer debt.

Total outstanding consumer debt increased from $2,668.9 billion in the first quarter of 2012 to $2,708.5 billion by the end of the second quarter. Consumer debt had peaked in the second quarter of 2008 at $2.609 trillion and fell to a four year low in the third quarter of 2010 but has been on the rise every quarter since.

Total mortgage debt fell 0.5 percent from $9,640.7 billion in the first quarter to $9,589.7 billion in the second. The last time that total mortgage debt was that low was in the second quarter of 2006 when total mortgage debt stood at $9,492.3 billion. Household mortgage debt peaked at $10.629 trillion in the first quarter of 2008.

Household net worth, the difference between the value of assets and liabilities, was $62.7 trillion at the end of the second quarter of 2012, about $300 billion less than at the end of the first quarter.

Tags: Federal Reserve, Flow of Funds, mortgage debt, consumer debt, household debt

Source:
Federal Reserve