Outstanding first mortgage balances reached $8.8 trillion in February as debt barreled ever closer to an all-time high of $9 trillion tallied in 2008 — in the midst of the housing crisis.
Year-over-year, first mortgage debt rose 3.8 percent, from $8.49 trillion, and outstanding balances have grown at a breakneck pace of $25 to $30 billion per month, according to data from the latest Equifax National Consumer Credit Trends report released on Wednesday.
Home equity loan origination rose 11 percent year-over-year while balances on home equities have steadily declined since a 2007 peak, falling 65.2 percent during that 11-year period.
Outstanding balances on auto loans and leases, meanwhile, have increased 4.8 percent year-over-year, to $1.24 trillion, according to the report. The number of outstanding accounts rose modestly, by 3.8 percent, to 85.6 million since February 2017, according to the Equifax report.
Gunnar Blix, deputy chief economist for Equifax, tamped down fears of a looming housing bubble, saying that unlike the economic climate leading up to the so-called Great Recession, mortgage rates today remain historically low while the economy overall continues to flourish.
“Despite nearing the pre-Great Recession peak in nominal terms, the market for first mortgages is in a much healthier place than in 2008, with low interest rates and normalized home prices supporting affordability,” Blix said. “Borrowers are also taking advantage of favorable used car prices and opportunities to consolidate high-interest debt with consumer finance loans.”
Email Jotham Sederstrom