MarketWatch – Steve Goldstein
Home-mortgage debt in the third quarter rose for the first time since the Great Recession, according to the latest data showing consumers beginning to add leverage as the economy improves. Home-mortgage debt rose at a seasonally adjusted annual rate of 0.9%, or $87.4 billion, in the third quarter, the first gain since the first quarter of 2008, the Federal Reserve said Monday. The rise comes as house prices have been recovering and as the foreclosure crisis winds down.
According to separate data from CoreLogic, prices are up about 13% year-on-year as foreclosures have dropped 30%. The $9.39 trillion in home-mortgage debt is nonetheless down 12% from the peaks in the first quarter of 2008, before the bubble in the housing market burst, reflecting Americans both voluntarily and not voluntarily getting out of home ownership. The rise in mortgage debt comes as consumer credit, led by auto and student loans, continues to expand. That led the total increase in household debt to reach 3%, the biggest rise since the first quarter of 2008.