Even with the rise of Americans buying homes at a high price, data shows that mortgage debt only changed a little.
The Federal Reserve Bank of New York said on Thursday that the present U.S. mortgage debt fell to $8.12 trillion, dropped $55 billion, for the second quarter, about the same level when the real estate market was at the bottom three years ago.
The second quarter's decline occurred even if Americans are turning to more new mortgages, either to pay old loans or to purchase homes. New mortgages add up to $466 billion in the second quarter, the most in almost two years.
The amount of new mortgages has also increased for four straight quarters, the New York Fed said, after dropping to a 14-year low of $286 billion in last year's second quarter.
Americans are paying down mortgage debt at roughly the same pace as new loans are made, evidence that homeowners remain wary of housing-related debt.
According to an economist from the New York Fed., a wave of refinancing has lowered borrowing rates, allowing homeowners to pay down more principal each month and less interest. Many potential home buyers are also making larger down payments, while most of the investors and buyers pay cash.
The rapid growth of rental homes also affected the present mortgage debt rates. Most Americans prefer to rent than to pay for their own homes. Just 63.4 percent of Americans are homeowners, down from 69 percent in 2007, the lowest level in more than four decades.
As the mortgage debt slipped, Americans are inclined to borrow money to purchase cars. New auto loans rose to a 10-year high of $119 billion. That pushed total outstanding auto loans above $1 trillion for the first time.
A complete file of the report of the Federal Reserve Bank of New York is made available for public viewing in their website.