The State of Household Debt in America
American households are becoming increasingly indebted.
In 2003, total household debt was $7.23 trillion, but that figure has recently doubled to $14.56 trillion in 2020. With just under 130 million households in the country, this equates to an average of $118,000 of debt per household.
Here’s how the various forms of U.S. household debt compare.
|Type of Debt||2003 (in trillions)||2020 (in trillions)||% Growth|
|Home Equity Revolving||$0.24||$0.35||+45%|
Mortgages: Steep Price to Pay for Home Ownership
Making up roughly 70% of all household debt, and growing $5.1 trillion since 2003, mortgage debt now stands at $10.04 trillion.
A fundamental driver of mortgage activity is interest rates. Given the two variables tend to have an inverse relationship with one another, interest rates have a big impact on the affordability of housing. As long as U.S. interest rates remain near 200-year lows, its likely mortgages will maintain at elevated levels.