The Federal Reserve reports that consumer borrowing increased at an annual rate of 7.4% in November.  That’s much higher than the 1% increase reported in October.

The segment of borrowing that includes debt from credit cards skyrocketed at a yearly rate of 11.3%.  That’s a 6-month high.  The surge apparently means that consumers are relying more heavily on credit cards, now that home equity lines of credit are drying up.

Auto loans also rose in November, increasing at a rate of 5.1%.  Interestingly enough, car loans had decreased 3.5% in October.

Total credit is now up by $15.4 billion—that’s a great deal more than the $8.5 billion that had been predicted by forecasters.

The housing crisis appears to be largely responsible for the increased credit card debt.  Home prices have been falling and standards for home loans have gotten stricter.  As a result, it’s become more difficult to sell a home at a good price.  Therefore, a number of homeowners have been tapping into their credit accounts in order to stay afloat.

Total consumer credit now stands at $2.51 trillion, which represents a record.  The report by the Federal Reserve gauges debt not secured by real estate.  That means that mortgages are not covered in the report.

The housing market is not expected to recover until at least the middle of 2008.  So far, the nation’s housing troubles have not led to a full-blown recession, although that’s still a possibility.  Some observers are urging the Federal Reserve to cut interest rates once again in an attempt to jump-start the housing sector.

Some pessimistic forecasters are predicting that house prices will not recover until 2010.  That’s particularly bad news for those who need to sell their homes this year in order to relocate to new jobs.