October 11, 2011 (Chris Moore)
American household debt declined at an annual rate of 0.5 percent in the second quarter of 2011, continuing a trend that started in the first quarter of 2008 according to the Federal Reserve’s latest Flow of Funds Report.
Home mortgage debt in the second quarter fell at an even faster pace, 2.5 percent, about the same pace that was observed in the first quarter.
Total American household debt peaked in the second quarter of 2008 at $13.929 trillion and has declined every month since, reaching $13.298 trillion in the second quarter of this year.
Total mortgage debt peaked a quarter earlier in 2008, reaching $10.611 trillion in the first quarter. Mortgage debt has also declined almost every month since then to $9.920 trillion by the end of the second quarter of this year.
The last time that total mortgage debt was that low was in the fourth quarter of 2006 when total mortgage debt stood at $9.868 trillion.
Total consumer debt, including auto loans and credit cards, has stayed relatively stable during that time. In the fourth quarter of 2006, Americans owed $2.416 trillion in consumer debt. In the second quarter of this year, that amount stood at $2.469 trillion.
Consumer debt peaked in the first and second quarter of 2008 at $2.609 trillion.
Tags: Federal Reserve, Flow of Funds, mortgage debt, consumer debt, household debt