November 13, 2019 / 9:12 PM / 24 days ago

U.S. household debt in four charts

(Reuters) - Low interest rates have induced Americans to pick up their borrowing to a record level, and fewer are finding themselves with severe credit problems such as bankruptcy, foreclosure or debt collection proceedings.

“It’s clear that even though debt is still really climbing, that people right now are still handling their business pretty well,” said Matt Schulz, chief industry analyst for CompareCards.com.   

U.S. households had nearly $14 trillion in outstanding debt as of the end of the third quarter, data from the Federal Reserve Bank of New York showed on Wednesday.

Following are four charts painting a picture of the household debt scene:

TOTAL DEBT

American consumers now have a record $13.95 trillion in debt. 

While that is a record high, how it stacks up as a percentage of the economy is not. Nor is it growing as fast relative to gross domestic product as it was before the 2007-2009 financial crisis. 

Household debt is now about 73% of GDP versus around 83% a decade ago. 

(Graphic: U.S. household debt, here)

DEBT SHARE BY TYPE

Mortgage debt accounts for roughly two-thirds of household debt, a level that has remained relatively stable in the last few years. 

Student loan debt’s share, however, has doubled since the crisis and is now the second largest category of consumer debt. 

(Graphic: Mortgages account for most U.S. household debt, here)

STUDENT LOANS

Americans continue to pile on loans for college and other post-secondary education costs. They added another $20 billion in the third quarter, bringing the total to $1.5 trillion. 

Student debt is now equal to nearly 8% of GDP, up from less than 2% in 2004. It could surpass 10% of GDP by 2025 at its current growth rate. 

(Graphic: Student loan debt is at a record $1.5 trillion, here)

BANKRUPTCIES, FORECLOSURES & COLLECTIONS

There was a modest uptick in loans in some measure of delinquency in the third quarter, but several gauges of severe credit stress are at or near record lows. 

The number of new personal bankruptcy filings last quarter dropped to the lowest since the New York Fed began tracking the data early this century, and the number of households entering foreclosure proceedings on their homes was the second lowest on record. 

Meanwhile the percentage of delinquent loans being pursued by third party collection agencies dropped below 9% for the first time. 

(Graphic: Bankruptcies, foreclosures and debt collection, here)

Reporting by Dan Burns; Editing by Andrea Ricci

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below