U.S. household debt – including mortgage debt – reached a record $17.94 trillion in the third quarter, according to a WalletHub report that uses data from the Federal Reserve Bank of New York.
After adjusted for inflation, that figure is roughly 6% below the record set in 2008.
WalletHub also released a new nationally representative survey gauging how households are dealing with debt.
As per the firm’s report, total household debt increased by $83 billion during the third quarter, which is roughly 6% below the record from 2008.
The average household owed a total of $149,358 at the end of the third quarter, which is $13,357 below the all-time high.
Despite increasing recently, the ratio of total household debt to deposits indicates consumers are in good shape, as it’s still below pre-Covid levels and roughly 46% lower than its early 2000s peak, the firm says.
The ratio between total household debt and assets continues to be at a very healthy level of around 9.7%.
As per the firm’s data, 58% of Americans say they are struggling with their debt, while 48% of Americans think their household debt is affecting their health.
Nearly 3 in 5 Americans say their debt influenced how they voted in the recent election.
“Household debt increased significantly in the third quarter, with people adding around 4 percent more debt to their tab than they did in the third quarter,” says John Kiernan, editor for WalletHub, in a release. “This pushed total household debt to a new record high in absolute terms. When adjusting for inflation, debt levels look more favorable, but that might not continue to be true if we have another debt-fueled fourth quarter this year. Holiday shoppers need to remember that even though the Federal Reserve is cutting interest rates, debt is still very expensive right now. In addition, we won’t be surprised if interest rates go back up before too long, as inflation hasn’t been properly dealt with and a new tariff program could create additional inflationary pressure.”
Photo: Bikram Sharma