Total consumer debt hit a fresh new high in the first quarter of 2023, pushing past $17 trillion even amid a sharp pullback in home borrowing.
The total for borrowing across all categories hit $17.05 trillion, an increase of nearly $150 billion, or 0.9% during the January-to-March period, the New York Federal Reserve reported Monday. That took total indebtedness up about $2.9 trillion from the pre-Covid period ended in 2019.
That increase came even though new mortgage originations, including refinancings, totaled just $323.5 billion, the lowest level since the second quarter of 2014. The total was 35% lower than in the fourth quarter of 2022 and 62% below the same period a year ago.
New home loans peaked at $1.22 trillion in the second quarter of 2021 and have been falling since as interest rates have increased. A series of Fed rate cuts helped push 30-year mortgage rates to a low around 2.65% in January 2021.
But rates are now around 6.4%, as the central bank has enacted 10 rate increases totaling 5 percentage points to fight inflation, according to central bank data through Fannie Mae. The higher rates helped push total mortgage debt to $12.04 trillion, up 0.1 percentage point from the fourth quarter.
