NEW YORK, May 15 (Reuters) – Americans’ appetite for taking on new mortgages slowed substantially during the first quarter, data released by the New York Fed on Monday showed, amid a modest gain in overall household borrowing levels at the start of the year.

Overall household debt levels rose by 0.9% to $17.05 trillion during the first three months of the year, the bank said in its latest Quarterly Report on Household Debt and Credit, noting that overall debt levels are nearly $3 trillion higher than in 2019 before the onset of the coronavirus pandemic.

New York Fed researchers view overall debt levels as relatively healthy, with some pockets of nascent concern. The data does not capture much in the way of an impact that may have ensued from banking sector stress that kicked off in March, the researchers said.

The central bank data showed how the sharply higher interest rate environment the Fed has been putting in place over the last year to lower high inflation has weighed on the housing market.

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