The newest numbers from the Federal Reserve are out today and the picture they paint shows that Americans are feeling a lot more comfortable with debt than in the recent past.
Americans eclipsed the $4 trillion mark in non-mortgage debt late last year and show no signs of slowing down their borrowing.
Never has the populace owed this much money in non-mortgage debt in the past. Even including mortgages, we are only a month or two away from eclipsing our previous debt record set at the height of the housing bubble.
All types of debt, mortgage and non-mortgage, rose in the last quarter of 2016. Credit card and student loan debt (the most popular unsecured debt) total $2.09 trillion. However, both categories saw delinquency rates rise over the same period of time, with credit card rates inching up about 1% of what they were in Q3 and student loan delinquencies going up about 3%.
The combination of increasing delinquency rates and increasing debt loads looks a lot like the beginning stages of the 2008 recession all over again. This time, the total amount of debt at risk is going to be far greater, even with tighter lending standards.
Credit scores ended the year at an average of 695 overall. Lending to those under the average credit score rose significantly towards the end of the year, especially in the auto loan category.
By the end of March 2017, we will have likely amassed more household debt as a nation than every before. Not that it is necessarily a bad thing, but warning signs are starting to pop up in both the housing market and unemployment data that we may be in for an economic slowdown.