U.S. mortgage debt reached a record in the second quarter, exceeding its 2008 peak as the financial crisis unfolded, The Wall Street Journal reports.
Mortgage balances rose by $162 billion in the second quarter to $9.4 trillion, surpassing the high of $9.3 trillion in the third quarter of 2008, the Federal Reserve Bank of New York said Tuesday.
The milestone for mortgage debt has been long in the making. Americans’ mortgage debt dropped by about 15% from the 2008 peak to the trough in the second quarter of 2013 and has climbed slowly since then.
Total household debt has been on the rise since mid-2013. It rose by 1.4% from the first quarter to $13.86 trillion, the 20th consecutive quarter of increase. Still, the household debt picture is much different in 2019 than it was 11 years ago, since lending standards are tighter and less debt is delinquent today.
The second quarter saw a steep drop in the 30-year mortgage rate, which boosted borrowers’ incentive to take out a mortgage or refinance. The average rate on a 30-year fixed-rate mortgage dropped below 4% in May for the first time since early last year.
Despite the higher debt loads, Americans appear to be keeping up with their payments. The report found that 95.6% of balances were current, the highest level of the current expansion. Read the full story.