Mortgage debt decreased at the end of 2011

Consumer debt increased during the fourth quarter last year, as overall mortgage debt edged lower.

Consumer debt increased during the fourth quarter last year, as overall mortgage debt edged lower.

According to a recent report from the Federal Reserve, consumer debt rose 0.3 percent during the three-month period from the quarter before - the first recorded gain in nearly four years. However, despite the increase at the end of the year, overall debt during the course of 2011 was 0.9 percent lower than during 2010.

Meanwhile, mortgage records indicate that mortgage debt fell 1.5 percent on a seasonally adjusted basis, as more borrowers were able to make their home loan payments, thanks in part to stabilizing economic conditions. 

The economy has continued to gain momentum in recent months, as the unemployment rate continues to hover at 8.3 percent. Many experts agree that an improving job market is a cornerstone of the real estate industry staging a rebound.  

"The improving labor market is another sign that the recovery is broadening and reduces the urgency for the Fed to act now," said Moody's Analytics senior economist Ryan Sweet.

There were an estimated 210,000 new jobs created in February, which built upon the 243,000 reported at the beginning of 2012. However, according to the the Fed, there are still approximately 23.8 million Americans out of work or who are underemployed.



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