Tag Archives: Mortgage Debt

While household debt increased in Q2, the mortgage sector’s share of that debt declined from a huge spike in the first quarter, according to the New York Fed.

"The trend in the market indicates consumers appear more confident in the economy and are moving forward with their lives and borrowing money again." -Assad Lazarus, SVP, Product and Customer Experience at Equifax Personal Information Solutions.

A new article from Credit.com suggests that when given a choice between different types of debt, fewer consumers take out home mortgages and are much more likely to carry other kinds of debt.

Many Americans are still struggling with mortgage debt, which is the third most-popular form of debt in the nation. Much of this debt stems from borrowing at the wrong time and for the wrong purpose, preventing consumers from achieving financial stability.

The Federal Reserve Bank of New York reported Thursday in their Household Debt and Credit Report that mortgage debt lowered slightly in the second quarter of 2015.

A recent report the PEW Charitable Trusts found that housing debt is the largest liability for most households, with other debt remaining higher than 1990's levels.

The New York Fed recorded an increase of $129 billion in national outstanding household debt in the first three months of the year, bringing the total debt level up to $11.65 trillion. Leading the increase was a rise in mortgage debt, which was up by $116 billion from the end of 2013, according to the bank. However, with originations dropping to $332 billion—the lowest level since the housing recovery started—there was little to celebrate on that front.

The percentage of older Americans with outstanding mortgage debt has increased since the start of the housing crisis, according to a report released Wednesday by the Consumer Financial Protection Bureau (CFPB). In fact, according to the bureau, about half of retired seniors with mortgage debt pay more than 30 percent of their household income on housing costs.

According to Equifax’s latest National Consumer Credit Trends Report, the total balance of first mortgages in February came up to $7.97 trillion, a 2.8 percent year-over-year increase and the highest balance since December 2011. “The decline in mortgage balances from accelerated amortization and foreclosure write-offs has finally been overcome by increases in mortgage debt due to home purchase lending,” said chief economist Amy Crews Cutts.

Outstanding home finance balances increased for the third straight month in January, signaling what might be the start of a long-term resurgence in borrowing, Equifax reported in its most recent National Consumer Credit Trends release. “American consumers have shed more than $1.5 trillion in mortgage debt since the start of the financial crisis and only now seem interested in investing in housing again,” said Amy Crews Cutts, chief economist.