The Federal Reserve Bank of New York reports that total consumer debt in the US surged by $109 billion in Q2 2024, reaching an unprecedented $17.8 trillion. This marks a 0.6% increase from the previous quarter and $3.7 trillion higher than late 2019 levels. Mortgage balances climbed by $77 billion to $12.52 trillion, while auto loans grew by $10 billion, hitting $1.63 trillion. Additionally, credit card debt spiked by $27 billion, totaling $1.14 trillion, which is 5% higher than the same quarter last year.
We will see even more households plunging into debt when interest rates fall again for the time being in the cycle and financing becomes cheaper. But a la long I see higher interest rates on loans, it is a trap that is building up here and will snap shut as many people need credit out of sheer necessity or are addicted to consumption.