Buy a lot of houses and cars!Us household debt tops $15.6 trillion in 2021?

2022-05-08 0 By

Financial news:Total household debt in the US surged by $1 trillion ($1.02 trillion) in 2021, the largest increase since 2007 (and in 14 years), bringing total household debt held by US households to nearly $15.6 trillion, according to new data released Tuesday by the Federal Reserve Bank of New York, an arm of the Federal Reserve.So the question is: What happened?Why has household debt exploded?According to the Federal Reserve Bank of New York, this is mainly due to a surge in home and car loans in 2021, which ultimately directly drives up overall household debt levels.Starting with the types of household debt, first of all, the largest increase in household debt in the US in 2021 will be mortgage balances!To put that in perspective, in the fourth quarter of last year, us households borrowed $258 billion more on their mortgages. Finally, in 2021, us households borrowed $4.5 trillion more on their mortgages to reach $10.93 trillion, the highest level since 1999.Second, the second largest “contributor” to US household debt is car loans.In the fourth quarter of last year, American households added $181 billion to their car loans, but that was largely because Americans were buying more expensive cars, not more.In addition, the increase in auto lending is behind a surge in vehicle prices as automakers grapple with semiconductor chip shortages and global supply chain problems.In response, Wilbert Van Der Klaauw, vice president of the Federal Reserve Bank of New York, pointed out in a statement that last year, American household mortgage and car loans increased sharply, and this was mainly due to the rising prices of homes and cars.The third largest portion of household debt is credit card debt, which ended up at $856 billion, while student debt actually fell by $8 billion, with lower student enrollment cited as a contributing factor.Indeed, just last year, many Americans struggled to make ends meet as inflation soared to 7 percent in December, the largest increase in nearly four decades.In addition, according to RT, median incomes in the US fell 3 per cent, while the rising cost of living means consumers have to pay more for everything from groceries to gas.As of now, the US has the second largest household debt in the world. By 2020, household debt will exceed 216% of GDP, while Hong Kong has the highest household debt to GDP ratio of nearly 260%.What do you think about that?What do you think will happen to HOUSEHOLD debt next?Note: this article is compiled by wang Ye said finance, if you need to reprint please pay attention to the account in advance, private chat contact Wang Ye himself, after obtaining authorization to reprint, reprint please original reprint, shall not carry out any graphic transformation atlas, video and other forms of reprint, infringement will be prosecuted!In addition, the views in this article are personal views, only used for learning, exchange and discussion, do not constitute investment advice!If there are omissions, mistakes, welcome criticism and correction!Thank you for reading, please leave a comment, if you like our article, you can directly like it in the following ↓↓↓.