November 11, 2023
Americans are finding themselves further and further in debt. And one specific age group is really in trouble.
Before I tell you who – let’s talk about the full report released this week by the Federal Reserve. This is the quarterly report for household debt for the third quarter of 2023. And it found Americans are $17.29 trillion in debt. That’s more than 1.3% than the second quarter and is yet again – another record high.
There were three big contributors to this debt.
The biggest were mortgage balances which increased again over the second quarter now sit at more than $12.14 trillion nationwide.
Not surprising – student loan debt increased by $30 billion in the third quarter to more than $1.6 trillion. Of course – that’s because those payments resumed in September for millions of federal student loan borrowers after they had been paused for three years.
And lastly – credit card debt increased by $48 billion in the third quarter. That’s an almost 5% increase over the second quarter. That means nationwide Americans are collectively in $1.08 trillion in credit card debt. That’s $154 billion more than the third quarter of last year and marks the largest year-over-year increase in credit card balances in 23 years. And not only are Americans racking up more credit card debt – they’re also falling delinquent on that debt. Serious delinquencies in the third quarter were at almost 6%…in the third quarter of 2022 delinquencies were only 3.7%.
So remember how I said there’s one age group that’s really in trouble when it comes to debt?
That group is consumers under the age of 50. According to this fed report, those under 50 held $9.5 trillion of debt in the third quarter. That’s up from $9.3 trillion dollars of debt they held in the second quarter.
And specifically – when it comes to credit card delinquencies – millennials were the only age group who have now exceeded the delinquency rate they had in the third quarter of 2019 before the pandemic. But gen z had the most credit card delinquencies.
But by far the most debt for every age group comes from mortgages. You can see it here in the orange.
For those of you in the 18 to 29 category, as I said before you have the most student loan debt in red and the most auto loan debt in green. And the least amount of mortgage debt – probably because it’s extremely difficult right now for first time homebuyers to get into a house.
Read the report from the NY Fed here.
Read the blog from the NY Fed here.
