Household debt rose by $241 billion in the fourth quarter, the biggest increase since the third quarter of 2007, according to the Federal Reserve Bank of New York. The gain was paced by a $152 billion pickup in mortgage debt, triggered in part by reduced foreclosures.
"This quarter is the first time since before the Great Recession that household debt has increased over its year-ago levels suggesting that after a long period of deleveraging, households are borrowing again," said Wilbert van der Klaauw, an economist at the New York Fed. At the same time, mortgage originations slid by $97 billion to $452 billion as would-be home buyers balked at rising interest rates.
Overall household borrowing, which is $11.5 trillion, remains 9.1 percent below the pre-crisis peak of $12.7 trillion.