NEW YORK – The Federal Reserve Bank of New York's Center for Microeconomic Data today issued its Quarterly Report on Household Debt and Credit . The Report shows that total household debt increased by $333 billion (2.2%) to $15.58 trillion in the fourth quarter of 2021. The total debt balance reflects an increase of $1 trillion during 2021 and is $1.4 trillion higher than at the end of 2019. In nominal terms, the 2021 total increase in overall debt is the largest seen since 2007. The Report is based on data from the New York Fed's nationally representative Consumer Credit Panel.
Mortgage balances rose by $258 billion in the fourth quarter of 2021 and stood at $10.93 trillion at the end of December. Credit card balances increased by $52 billion, representing the largest quarterly increase observed in the 22-year history of the data. However, credit card balances remain $71 billion lower than at the end of 2019. Auto loan balances increased by $15 billion, consistent with the previous two quarters. Student loan balances contracted by $8 billion, remaining roughly flat in nominal terms at the end of 2021 after almost two decades of steady increases. In total, non-housing balances grew by $74 billion.
New extensions of installment credit were at historically high volumes in 2021 for both mortgages and auto loans. Mortgage originations were at $1 trillion in Q4 2021, contributing to a historic high in annual terms with over $4.5 trillion in mortgages originated over the course of 2021. Although the credit scores of newly originated mortgages have declined in recent quarters from the beginning of the pandemic, they remain high and reflect the high quality of newly opened mortgages and a higher share of refinances. The volume of newly originated auto loans was $181 billion during Q4, primarily reflecting a higher origination amount per loan rather than more loans originated. Aggregate limits on credit card accounts increased by $96 billion and now stand at $4.06 trillion–$160 billion above the pre-pandemic level.
"The total increase in nominal debt during 2021 was the largest we have seen since 2007," said Wilbert Van Der Klaauw, senior vice president at the New York Fed. "The aggregate balances of newly opened mortgage and auto loans sharply increased in 2021, corresponding to increases in home and car prices."
The New York Fed also issued an accompanying Liberty Street Economics blog post on newly originated auto loans with a closer look at the growth in volume and average dollar amount of these loans in 2021.
The Quarterly Report includes a summary of key takeaways and their supporting data points. Overarching trends from the Report's summary include:
Housing Debt
- There was $1.03 trillion in newly originated mortgage debt in Q4 2021, with 67% of it originated to borrowers with credit scores over 760. Two percent of newly originated mortgages were originated to subprime borrowers, a sharp contrast to the 12% average seen between 2003-2007.
- About 8,900 individuals had a new foreclosure notation added to their credit reports during Q4 2021. Although the hold on foreclosures due to the CARES Act was lifted on July 31st, additional federal and state policies, along with strong income and home price growth, have forestalled many foreclosure starts.
- The share of mortgage balances 90+ days past due remained at 0.5%, a historic low.
Student Loans
- Outstanding student loan debt stood at $1.58 trillion in the fourth quarter, an $8 billion decline from Q3 2021.
- About 5% of aggregate student debt was 90+ days delinquent or in default in Q4 2021. The lower level of student debt delinquency reflects a Department of Education decision to report current status on loans eligible for CARES Act forbearances.
Account Closings, Credit Inquiries and Collection Accounts
- 224 million new accounts were opened in the fourth quarter, an uptick from the previous quarter and slightly higher than typical pre-pandemic levels.
- 188 million accounts were closed in the fourth quarter, a decrease from the previous quarter.
Household Debt and Credit Developments as of Q4 2021
| Category | Quarterly Change * (Billions $) | Annual Change** (Billions $) |
Total As Of Q4 2021 (Trillions $) |
| Mortgage Debt | (+) $258 | (+) $887 | $10.93 |
| Home Equity Line Of Credit | (+) $1 | (-) $31 | $0.32 |
| Student Debt | (-) $8 | (+) $21 | $1.58 |
| Auto Debt | (+) $15 | (+) $84 | $1.46 |
| Credit Card Debt | (+) $52 | (+) $37 | $0.86 |
| Other | (+) $15 | (+) $19 | $0.44 |
| Total Debt | (+) $333 | (+) $1,017 | $15.58 |
*Change from Q3 2021 to Q4 2021
** Change from Q4 2020 to Q4 2021
Flow into Serious Delinquency (90 days or more delinquent)
| Category 1 | Q4 2020 | Q4 2021 |
| Mortgage Debt | 0.7% | 0.3% |
| Home Equity Line Of Credit | 0.6% | 0.3% |
| Student Loan Debt | 2.8% | 1.1% |
| Auto Loan Debt | 1.8% | 1.6% |
| Credit Card Debt | 4.1% | 3.2% |
| Other | 3.7% | 2.9% |
| ALL | 1.3% | 0.7% |
About the Report
The Federal Reserve Bank of New York's Household Debt and Credit Report provides unique data and insight into the credit conditions and activity of U.S. consumers. Based on data from the New York Fed's Consumer Credit Panel, a nationally representative sample drawn from anonymized Equifax credit data, the report provides a quarterly snapshot of household trends in borrowing and indebtedness, including data about mortgages, student loans, credit cards, auto loans and delinquencies. The report aims to help community groups, small businesses, state and local governments and the public to better understand, monitor, and respond to trends in borrowing and indebtedness at the household level. Sections of the report are presented as interactive graphs on the New York Fed's Household Debt and Credit Report web page and the full report is available for download.
