Household Debt Breakdown

Source: Motley Fool, 23 September 2018 and 25 March 2018

Links: 10 Years Later: How Has America’s Consumer Debt Evolved?; The Average American’s Debt Balances: Anything Look Familiar?

Summary: Mortgages make up by far the largest share of Americans’ household debt. The good news is that the total is $600 billion lower now than it was 10 years ago. However, the total amount of debt that Americans carry is higher due to big increases in student and auto loans. Credit card debt is up only slightly and personal loans are down.

Statistics:

• The average American loan balances are $201,811 for mortgage, $34,144 for student loans, $18,588 for auto, and $6,354 for credit cards.
• The national total figures are $10.1 trillion for mortgages, $1.53 trillion for student loans, 1.13 trillion for auto loans, and 1 trillion for credit cards. Personal loans are $186 billion, much lower than the others.
• The grand total of debt carried by American households is up 5% since the Great Recession in 2008: from $13.32 trillion to $13.95 trillion (that is a difference of $630,000,000,000). However, GDP is up 30% in the same time period.
• American mortgage debt is down 5.6%– we owe $600 billion less on homes.
• Student debt is up a whopping 144%– we owe $900 billion more on education loans.
• Auto debt is up 41.6%–we owe $300 billion more on our vehicles.
• Credit card debt is up just 1.4%–we owe $14 billion more on plastic.
• Student loan debt is higher due to tuition costs that are rising faster than inflation.
• Since 2008, student loan debt has climbed from the 4th-highest kind of American debt to the 2nd highest, passing both car loans and credit cards.
• Auto loans are higher due to a combination of Americans buying more expensive cars and financing them over longer periods, keeping them in debt longer.
• “Here’s a statistic that sums up how the mortgage market has changed: In 2018, mortgage levels are about 68% of incomes. In 2008, this metric was at nearly 100%.”