Household Debt Rises While Mortgage Originations Decline
Summary
But new loan originations – both for home purchases and refinancing of existing mortgages – fell to $859 billion, the lowest since the second quarter of 2020. "The first quarter of 2022 saw an increase in mortgage and auto loan balances coupled with a typical seasonal decrease in credit card balances," Andrew Haughwout, director of Household and Public Policy Research Division at the New York Fed, said. "However, mortgage originations declined from the historically high volumes seen in 2021, reflecting an unwinding in the demand for refinances." The Fed’s analysis shows that mortgage refinances surged in the last two years, as many homeowners were able to take advantage of historically low interest rates. Yet, the beginning of 2022 shows a modest decline in purchase originations and a relatively sharp drop in refinances.