The total amount of US household debt was 16,900 billion dollars (15,670 billion francs) in the fourth quarter of 2022, according to the latest data in the New York Fed press release.
That’s $394 billion, or 2.4%, more than in the third quarter, and $2.750 billion more than at the end of 2019, before the Covid-19 pandemic hit the global economy.
Outstandings (total amount due) of credit cards, widely used in the United States for all types of purchases, are 986 billion dollars. “There is a trend that is accelerating. It represents more than twice the savings available to households”, reacted the director of investments at the private bank Oddo BHF Switzerland Arthur Jurus Friday evening in the show Forum of the RTS .
Sharp rise in home loan rates
Those of home loans amounted to 11,920 billion dollars. But sharp increases in rates on these loans since early 2022, in response to rate hikes from the US central bank (Fed) to curb high inflation, have caused new home loans to slow, “after two years of historically high volumes”. .
“Home loan issuance, which includes refinancing, fell to $498 billion in the fourth quarter, representing a return to lower levels last seen in 2019,” the New York Fed said.
Defaults on the rise again
Inflation and higher interest rates pose risks of default. The share of debt that has not been repaid “increased again in the fourth quarter for almost all types of debt, following two years of historically low defaults,” the statement said.
“Today there are 18 million Americans who are slow to pay the installments on their credits, while on average we are more around 15 million. A rather negative trend is therefore starting”, analyzes Arthur Jurus, who nevertheless underlines that the credit default rate, at 2%, is still “fairly low” and that the environment is still quite different from that before the subprime crisis.
oang/vic with afp
