Americans have $12.58 trillion of debt -- here's what it looks like

Americans’ debt balances rose “substantially” in the final quarter of 2016, according to the Federal Reserve Bank of New York.

Household debt totaled $US12.58 trillion as of December 31, 2016, according to the New York Fed’s latest quarterly report on credit.

Total debt increased by 1.8%, or $US226 billion, in Q4. That lifted household debt just 0.8% below the peak reached in the third quarter of 2008 as the US economy was mired in recession.

According to the report, Americans borrowed the most money since the recession to pay for new houses or to refinance their mortgages. Mortgage originations in the fourth quarter totaled $US617 billion.

Last year saw a sharp rise in new auto loans, helping carmakers post a record period of sales. In the fourth quarter, auto loan originations — appearances of new auto balances on consumer credit reports — increased by a record $US142 billion.

A greater share of mortgages and auto loans was granted to higher-quality borrowers. About 58% of all new mortgages in 2016 were approved for people with credit scores above 760. That was up from an average of 54% in 2015.

“The question from a macro perspective then becomes if the low-quality borrowers as a group are big enough to slow down the overall economic expansion,” said Torsten Slok, Deutsche Bank’s chief international economist, in a note on Friday. “So far banks have responded with a tightening in lending standards.”

Outstanding student loans — the largest source of debt besides mortgages — increased by $US31 billion to $US1.31 trillion.

Delinquency rates were “roughly stable” in Q4, the New York Fed said, although late payments on car loans rose to a post-recession high.

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