$12.73 Trillion in Household Debt In Q1 2017

Man wearing a shirt and a tie is being attacked by house and car debt.  Illustration.After a slow and steady upwards climb over the past four years, household debt in the United States hit an all-time high in Q1 of 2017.

In the third quarter of 2008, US household debt hit a high of $12.68 trillion before collapsing due to the "Great Recession". The popping of the credit bubble in 2008 started a long period of deleveraging in the United States, which only started to reverse in 2013.

According to the Federal Reserve Bank of New York, the United States had $12.73 trillion of total household debt at the end of Q1 2017, which is a new all-time record. While this is surely a sign of optimism and relative economic strength, there is also reason to worry that people are over-extending themselves once again and the mistakes of the past aren't being remembered.

Student loans continue to grow at an alarming pace, as they made up 10.6% of total household debt as of Q1 2017, up dramatically over the past ten years. Postsecondary education is becoming more and more expensive, and students are being forced to take out bigger and bigger student loans in order to keep up.

Here is a breakdown of the total consumer debt picture as of Q1 2017:

Housing (Mortgages and HELOCs) - 71.4%
Student Loans - 10.6%
Auto Loans - 9.2%
Credit Cards - 6%
Other - 2.9%


It's easy to point at these numbers and say that they are evidence of a stronger economy.

The US economy is heavily dependent on a confident consumer, however, and it should be worrying to see debt levels continue to ramp higher. In addition, the continued increase in student loan levels should be very concerning, as graduating students are facing increasingly high debt levels immediately upon graduating from college.

Source: NYTimes.com

Filed under: General Knowledge

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