Student Loans Soar To Record $1.111 Trillion, Up 12% In Past Year

When the Fed releases its quarterly household credit report, the one item most focused on is the amount of mortgages outstanding and originated in the prior quarter, since courtesy of its monthly consumer credit updates we know that US households have largely given up charging their credit cards at the expense of non-revolving student and car loans. So here is the summary.

First, the good news: courtesy of ZIRP mortgage defaults and discharges tumbled in Q1, resulting in an increase in total mortgage debt balances of $8.17 billion, or an increase of $116 billion in the quarter.

Now, the bad news: the increase in total mortgage balances had nothing to do with a surge in mortgage demand. Quite the contrary, as we have been reporting and as bank mortgage origination bankers have felt first hand, for whatever reason mortgage origination as a business has virtually slammed shut. The Fed confirmed as much when it reported just $332 billion in originations in Q1: well below the $452 billion in Q4, and certainly below the $577 billion a year ago.

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