Americans took on $1.02 trillion in new debt last year, thanks to homes and cars


U.S. household debt increased $1.02 trillion last year, the most since a $1.06 trillion rise in 2007, The Wall Street Journal reported Tuesday.
Total consumer debt is now hovering around $15.6 trillion, versus $14.6 trillion a year ago.
The jump "is largely a function of a sharp rise in prices for homes and cars," the Journal writes. For example, the price of the average U.S. home rose almost 20 percent in 2021, while "rising prices for new and used cars drove auto-loan originations to a record $734 billion."
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
That said, the increase in borrowing is not something of concern, economists for the Federal Reserve Bank of New York said. "Wealth increased across all income levels during the pandemic" and "delinquency levels on consumer loans are still hovering around record lows," the Journal notes.
As an added benefit, "some 87 percent of the new debt is tied to homes that can appreciate over time, allowing borrowers to build wealth," the Journal writes.
The news arrives as the Federal Reserve appears poised to raise interest rates to combat rampant inflation, CNBC notes.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Brigid Kennedy worked at The Week from 2021 to 2023 as a staff writer, junior editor and then story editor, with an interest in U.S. politics, the economy and the music industry.
-
5 cartoons about the TACO trade
Cartoons Political cartoonists take on America's tariffs, Vladimir Putin waiting for taco Tuesday, and a new presidential seal
-
A city of culture in the high Andes
The Week Recommends Cuenca is a must-visit for those keen to see the 'real Ecuador'
-
The Chagos Islands: Starmer's 'lousy deal'
Talking Point The PM's adherence to 'legalism' has given Mauritius a 'gift from British taxpayers'
-
Crypto firm Coinbase hacked, faces SEC scrutiny
Speed Read The Securities and Exchange Commission has also been investigating whether Coinbase misstated its user numbers in past disclosures
-
Starbucks baristas strike over dress code
speed read The new uniform 'puts the burden on baristas' to buy new clothes, said a Starbucks Workers United union delegate
-
Warren Buffet announces surprise retirement
speed read At the annual meeting of Berkshire Hathaway, the billionaire investor named Vice Chairman Greg Abel his replacement
-
Trump calls Amazon's Bezos over tariff display
Speed Read The president was not happy with reports that Amazon would list the added cost from tariffs alongside product prices
-
Markets notch worst quarter in years as new tariffs loom
Speed Read The S&P 500 is on track for its worst month since 2022 as investors brace for Trump's tariffs
-
Tesla Cybertrucks recalled over dislodging panels
Speed Read Almost every Cybertruck in the US has been recalled over a stainless steel panel that could fall off
-
Crafting emporium Joann is going out of business
Speed Read The 82-year-old fabric and crafts store will be closing all 800 of its stores
-
Trump's China tariffs start after Canada, Mexico pauses
Speed Read The president paused his tariffs on America's closest neighbors after speaking to their leaders, but his import tax on Chinese goods has taken effect