A measure of the threat of evictions and/or foreclosures on economically pressed American households is the sharp rise of household debt by $313 billion in the second quarter of this year, the largest increase in 14 years (that is, the biggest debt spike since the last gasp of the consumer debt bubble that imploded in 2007-08). Total household debt hit $15 trillion; it has risen by 6% in the six quarters since the end of 2019, but by 2.1% just in the second quarter 2021, according to the New York Federal Reserve Bank. This is an indirect measure of rapidly increasing inflation.
Dominating the jump was a $282 billion, or 3% jump in mortgage debt in the second quarter. American households’ mortgage debt, which had stagnated since 2008 and never gone above $9.5 trillion, has now reached $10.44 trillion in a sudden rise driven by exploding prices of new, and lately also existing homes. When home prices rise sharply, real estate taxes and insurance costs rise as well for all those homeowners who are neither selling nor buying, and in turn make them less able to afford the mortgage payment.
