More than $4.5 trillion in mortgages were originated in 2021, reaching an all-time high for the database, which began in 2000. Mortgage balances increased by $258 billion in the fourth quarter, to $10.93 trillion at At the end of December.
Auto loan originations returned to pre-pandemic trends, but loan sizes rose in response to rising prices, the New York Fed researchers said.
“As car prices have skyrocketed, buyers have taken out more loans to finance the added cost,” the researchers wrote in a blog post published Tuesday.
In a sign that consumers are returning to their pre-pandemic spending habits, credit card balances also increased by $52 billion in the fourth quarter. The largest quarterly increase seen in data history, but credit card balances are still $71 billion lower than at the end of 2019.
Credit card use typically increases in the fourth quarter as people shop for the holidays, but the rise could also reflect rising prices of goods and services, the researchers said.
So far, households have been able to absorb the biggest debt burdens and delinquencies remain low, thanks in part to savings built up before the pandemic and forbearance programs, the researchers said.
Still, it will be important to watch how some borrowers fare when they have to resume student debt payments in a few months, the New York Fed researchers said.
