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Household debt tops 2008 peak

NEW YORK — Americans’ appetite for debt is growing.

Total household debt climbed to $12.73 trillion in the first three months of the year, according to data released Wednesday by the Federal Reserve Bank of New York, a $149 billion increase from the end of 2016.

That means today’s debt level is higher than the $12.68 trillion peak hit in 2008.

But there are some key differences in the type of debt and who is borrowing compared to the Great Recession.

While mortgage balances still make up the majority of household debt, they are a smaller share of total obligations, the report showed.

Student and auto loans are also helping to fuel the increase in debt.

Outstanding student loan balances, which the Fed said have “remained stubbornly high” since 2014, grew by $34 billion to $1.34 trillion. Auto loans balances, which have been increasing for six years, swelled by $10 billion to $1.17 trillion.

Credit card balances shrunk by $15 billion to $764 billion, but there has been a recent uptick in delinquencies on these payments.

More of the debt is held by older, more credit-worthy borrowers compared to 2008, according to the Fed.

“These shifts in borrowing patterns and characteristics of borrowers, paired with the long economic recovery and a strong labor market, have resulted in very low delinquency rates for most types of debts except for student loans,” the Fed wrote in a post.

Higher debt levels can be a positive indicator for the economy. It shows that more people are qualifying for loans and that banks are comfortable lending. That’s good news for the economy since consumer spending makes up a big chunk of growth.