Americans are borrowing like never before, according to a new report from the Federal Reserve that revealed U.S. household debt swelled to a record $16.9 trillion in the final quarter of 2022, notching the largest quarterly increase in 20 years.
Total debt balances grew by $394 billion in the fourth quarter, driven mostly by a $254 billion increase in mortgage balances, according to the latest Quarterly Report on Household Debt and Credit from the Federal Reserve Bank of New York, released on Feb. 16.
Overall, household debt balances are now $2.75 trillion higher than at the end of 2019, the last year before the pandemic recession hit.
Much of the rise in household debt can be attributed to a tumultuous 2022, during which the Federal Reserve boosted its benchmark interest rate to more than 4 percent by the end of December from near zero last March, the fastest pace of monetary tightening since the early 1980s….