Households in the U.S. expanded their debts in the first three months of the year, marking the first quarterly increase in over two years on higher mortgage balances, according to Bloomberg. On Monday, the Federal Reserve Bank of New York reported that consumer indebtedness in the U.S. rose 0.3%, or $33 billion, in the first quarter of the year to $11.5 trillion. The increase was the first since 2008 and brings consumer debt to a level 8.2% or $1.03 trillion below the peak value recorded at the onset of the financial crisis.
NY Fed Vice President Andrew Haughwout said, “We are beginning to see signs of credit markets healing gradually and evidence of greater willingness of consumer to borrow and banks to lend.” Mortgage obligations increased for the third month in a row to $499 billion, while bankruptcies dropped 13.3% to 434,000. The number of new foreclosures was down by 17.7% year-over-year, and credit card limits rose by roughly 1%, although balances were 4.6% lower.