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Archive for Friday, March 10, 2006

Mortgage borrowing spurs record debt

March 10, 2006

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U.S. households took on debt at the fastest pace in 20 years in 2005, fueled by a housing boom that boosted their net worth to a record $52.1 trillion, the Federal Reserve said Thursday.

The Fed's quarterly flow of funds report shows the explosion of debt in the U.S. economy continued in 2005, with net savings in the economy falling below 1 percent of gross domestic product for the first time on record.

Led by a surge in mortgage borrowing, U.S. households' debt increased 11.7 percent to a record $11.5 trillion in 2005, the fastest growth since 1985, the Fed said.

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