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The State of Household Debt in America

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Growing household debt in America

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The Briefing

  • U.S. household debt stands at $14.56 trillion, and has doubled since 2003
  • Student loan debt has expanded a colossal 550% in the same time frame

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 Debt2003 (in trillions)2020 (in trillions)% Growth
Mortgage$4.94$10.04+103%
Home Equity Revolving$0.24$0.35+45%
Auto Loan$0.64$1.37+137%
Credit Card$0.69$0.82+18%
Student Loan$0.24$1.56+550%
Other$0.48$0.42-12%
Total$7.23$14.46100%

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.

Students Continue Struggling with Student Debt

The second-largest form of debt is student loans. Although not quite the size of mortgages in raw dollars, student debt is the fastest growing as a percentage, having shot up 550% from 2003 to 2020.

The topic of debt is highly discussed in today’s political and economic climate. That’s largely because debt has risen on all fronts to unprecedented levels. For example, the U.S. national debt has recently passed $27 trillion while corporate debt stands at $10.5 trillion.

Throw the aforementioned household debt into the mix and you have a $52 trillion debt pile. That’s a big bill to pay.

Where does this data come from?

Source: Federal Reserve Bank of New York
Notes: Data ranges from Q1 2004 to Q4 2020

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Economy

Charted: Public Trust in the Federal Reserve

Public trust in the Federal Reserve chair has hit its lowest point in 20 years. Get the details in this infographic.

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The Briefing

  • Gallup conducts an annual poll to gauge the U.S. public’s trust in the Federal Reserve
  • After rising during the COVID-19 pandemic, public trust has fallen to a 20-year low

 

Charted: Public Trust in the Federal Reserve

Each year, Gallup conducts a survey of American adults on various economic topics, including the country’s central bank, the Federal Reserve.

More specifically, respondents are asked how much confidence they have in the current Fed chairman to do or recommend the right thing for the U.S. economy. We’ve visualized these results from 2001 to 2023 to see how confidence levels have changed over time.

Methodology and Results

The data used in this infographic is also listed in the table below. Percentages reflect the share of respondents that have either a “great deal” or “fair amount” of confidence.

YearFed chair% Great deal or Fair amount
2023Jerome Powell36%
2022Jerome Powell43%
2021Jerome Powell55%
2020Jerome Powell58%
2019Jerome Powell50%
2018Jerome Powell45%
2017Janet Yellen45%
2016Janet Yellen38%
2015Janet Yellen42%
2014Janet Yellen37%
2013Ben Bernanke42%
2012Ben Bernanke39%
2011Ben Bernanke41%
2010Ben Bernanke44%
2009Ben Bernanke49%
2008Ben Bernanke47%
2007Ben Bernanke50%
2006Ben Bernanke41%
2005Alan Greenspan56%
2004Alan Greenspan61%
2003Alan Greenspan65%
2002Alan Greenspan69%
2001Alan Greenspan74%

Data for 2023 collected April 3-25, with this statement put to respondents: “Please tell me how much confidence you have [in the Fed chair] to recommend the right thing for the economy.”

We can see that trust in the Federal Reserve has fluctuated significantly in recent years.

For example, under Alan Greenspan, trust was initially high due to the relative stability of the economy. The burst of the dotcom bubble—which some attribute to Greenspan’s easy credit policies—resulted in a sharp decline.

On the flip side, public confidence spiked during the COVID-19 pandemic. This was likely due to Jerome Powell’s decisive actions to provide support to the U.S. economy throughout the crisis.

Measures implemented by the Fed include bringing interest rates to near zero, quantitative easing (buying government bonds with newly-printed money), and emergency lending programs to businesses.

Confidence Now on the Decline

After peaking at 58%, those with a “great deal” or “fair amount” of trust in the Fed chair have tumbled to 36%, the lowest number in 20 years.

This is likely due to Powell’s hard stance on fighting post-pandemic inflation, which has involved raising interest rates at an incredible speed. While these rate hikes may be necessary, they also have many adverse effects:

  • Negative impact on the stock market
  • Increases the burden for those with variable-rate debts
  • Makes mortgages and home buying less affordable

Higher rates have also prompted many U.S. tech companies to shrink their workforces, and have been a factor in the regional banking crisis, including the collapse of Silicon Valley Bank.

Where does this data come from?

Source: Gallup (2023)

Data Notes: Results are based on telephone interviews conducted April 3-25, 2023, with a random sample of –1,013—adults, ages 18+, living in all 50 U.S. states and the District of Columbia. For results based on this sample of national adults, the margin of sampling error is ±4 percentage points at the 95% confidence level. See source for details.

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