This website collects cookies to deliver better user experience. Cookie Policy
Accept
Sign In
The Wall Street Publication
  • Home
  • Trending
  • U.S
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Markets
    • Personal Finance
  • Tech
  • Lifestyle
    • Lifestyle
    • Style
    • Arts
  • Health
  • Sports
  • Entertainment
Reading: U.S. Households Took On $1 Trillion in New Debt in 2021
Share
The Wall Street PublicationThe Wall Street Publication
Font ResizerAa
Search
  • Home
  • Trending
  • U.S
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Markets
    • Personal Finance
  • Tech
  • Lifestyle
    • Lifestyle
    • Style
    • Arts
  • Health
  • Sports
  • Entertainment
Have an existing account? Sign In
Follow US
© 2024 The Wall Street Publication. All Rights Reserved.
The Wall Street Publication > Blog > Markets > U.S. Households Took On $1 Trillion in New Debt in 2021
Markets

U.S. Households Took On $1 Trillion in New Debt in 2021

Editorial Board Published February 8, 2022
Share
U.S. Households Took On  Trillion in New Debt in 2021
SHARE

Auto loans helped push Americans’ level of household debt in 2021.

Photo: David Paul Morris/Bloomberg News

By

Orla McCaffrey

Updated Feb. 8, 2022 2:08 pm ET

Americans took on more new debt in 2021 than in any year since before the 2008-09 financial crisis.

Total household debt rose by $1.02 trillion last year, boosted by higher balances on home and auto loans, the Federal Reserve Bank of New York said Tuesday. It was the largest increase since a $1.06 trillion jump in 2007. Total consumer debt now sits at around $15.6 trillion, compared with $14.6 trillion a year earlier.

The increase is largely a function of a sharp rise in prices for homes and cars. The price of the average U.S. home rose close to 20% in 2021, boosting mortgage balances and pricing out many middle-class buyers. Rising prices for new and used cars drove auto-loan originations to a record $734 billion.

The rise in consumer borrowing isn’t cause for alarm, New York Fed economists said. Wealth increased across all income levels during the pandemic, according to the Federal Reserve, though much of the gains accrued to the richest Americans. Delinquency levels on consumer loans are still hovering around record lows.

What’s more, some 87% of the new debt is tied to homes that can appreciate over time, allowing borrowers to build wealth. Today’s home buyers also are in better financial shape. Subprime borrowers accounted for just 2% of the mortgage debt originated in the fourth quarter of 2021, down from an average of 12% in the years before the financial crisis.

Americans added $52 billion to their credit-card balances in the fourth quarter, the largest quarterly jump on record, the New York Fed said in its quarterly report on household debt and credit, which is based on data from Equifax Inc. credit reports. Pent-up demand for travel and entertainment purchases that consumers were unable or willing to make earlier in the pandemic boosted credit-card balances in the final three months of the year.

Credit-card balances fell sharply in the pandemic’s early months, the result of a decline in spending and availability of stimulus money that allowed borrowers to pay down their debt. Total credit-card balances stood at $856 billion at the end of 2021, down from $927 billion two years earlier.

The Federal Reserve has signaled it plans to raise interest rates in 2022 in response to stubbornly high inflation. WSJ’s J.J. McCorvey explains what higher rates could mean for your finances. Photo illustration: Todd Johnson

Write to Orla McCaffrey at orla.mccaffrey@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the February 9, 2022, print edition as ‘Household Debt Rose By $1 Trillion in 2021.’

Contents
Auto loans helped push Americans’ level of household debt in 2021.Orla McCaffrey
TAGGED:MarketsPAIDWall Street Publication
Share This Article
Twitter Email Copy Link Print
Previous Article Florists warn of higher prices, Super Bowl conflict for Valentine’s Day Florists warn of higher prices, Super Bowl conflict for Valentine’s Day
Next Article Pfizer Forecasts  Billion in 2022 Sales From Covid Vaccine, Treatment Pfizer Forecasts $54 Billion in 2022 Sales From Covid Vaccine, Treatment

Editor's Pick

I attempted Google’s new Search Dwell function and ended up debating an AI about books

I attempted Google’s new Search Dwell function and ended up debating an AI about books

Google’s new Search Dwell function lets customers maintain real-time voice conversations with an AI-powered model of Search The Gemini-powered AI…

By Editorial Board 6 Min Read
Valkyries convey again Chen and Bibby as EuroBasket hits roster
Valkyries convey again Chen and Bibby as EuroBasket hits roster

The Valkyries signed 2025 third-round draft decide Kaitlyn Chen and ahead Chloe…

3 Min Read
AI at Scale: Mohammed’s Revolutionary Architecture Behind the World’s Fastest Website Builder
AI at Scale: Mohammed’s Revolutionary Architecture Behind the World’s Fastest Website Builder

In an extraordinary technological breakthrough, Abdul Muqtadir Mohammed has fundamentally transformed how…

7 Min Read

Oponion

Discovering connections, 50 years after the autumn of Saigon

Discovering connections, 50 years after the autumn of Saigon

Fifty years in the past, 2-year-old Phan Kim Phuong was…

April 27, 2025

Extra People flip to dwelling cooking as financial considerations weigh

Quick meals staff are struggling to…

June 3, 2025

How To Tuck In A Shirt Correctly (And Maintain It There) | Fashion

With the potential exceptions of nudists,…

October 2, 2024

Consulting large PwC discourages White, Asian college students from making use of to profession program

RNC youth advisory council Co-Chair CJ…

February 5, 2025

Can Quebec’s Dams Power New York? Blackstone Is Betting $4.5 Billion on It.

Construction is expected to begin this…

February 18, 2022

You Might Also Like

Oil costs anticipated to be impacted following US bombing of Iran nuclear websites
Markets

Oil costs anticipated to be impacted following US bombing of Iran nuclear websites

FOX Enterprise host Liz Claman breaks down the impression on the oil markets and customers amid escalating tensions within the…

4 Min Read
America headed for ‘financial coronary heart assault’ on authorities debt, spending warns billionaire
Markets

America headed for ‘financial coronary heart assault’ on authorities debt, spending warns billionaire

Bridgewater Associates founder Ray Dalio discusses responding to the U.S. debt on 'The Claman Countdown.' Billionaire Ray Dalio, founding father…

4 Min Read
Main oil worth shock looming as Israel-Iran battle threatens crucial world delivery passage
Markets

Main oil worth shock looming as Israel-Iran battle threatens crucial world delivery passage

ExxonMobil CEO Darren Woods describes the impact of the Center East battle on the worldwide oil market on 'Particular Report.'…

4 Min Read
ExxonMobil CEO talks oil provide amid Iran-Israel battle
Markets

ExxonMobil CEO talks oil provide amid Iran-Israel battle

ExxonMobil CEO Darren Woods describes the influence of the Center East battle on the worldwide oil market on 'Particular Report.'…

4 Min Read
The Wall Street Publication

About Us

The Wall Street Publication, a distinguished part of the Enspirers News Group, stands as a beacon of excellence in journalism. Committed to delivering unfiltered global news, we pride ourselves on our trusted coverage of Politics, Business, Technology, and more.

Company

  • About Us
  • Newsroom Policies & Standards
  • Diversity & Inclusion
  • Careers
  • Media & Community Relations
  • WP Creative Group
  • Accessibility Statement

Contact

  • Contact Us
  • Contact Customer Care
  • Advertise
  • Licensing & Syndication
  • Request a Correction
  • Contact the Newsroom
  • Send a News Tip
  • Report a Vulnerability

Term of Use

  • Digital Products Terms of Sale
  • Terms of Service
  • Privacy Policy
  • Cookie Settings
  • Submissions & Discussion Policy
  • RSS Terms of Service
  • Ad Choices

© 2024 The Wall Street Publication. All Rights Reserved.

Welcome Back!

Sign in to your account

Lost your password?