Debt

Household Debt In America, In 3 Graphs

For more, see What America Owes In Student Loans

U.S. households owe a bit less than they did at the peak of the bubble. But they still owe a lot: $11.4 trillion, give or take a few billion. Mortgage and home-equity debt is still by far the biggest chunk of that debt.

Total U.S. Household Debt (August 2012)

Source: Federal Reserve Bank of New York

One useful way to think about that number, besides marveling at its sheer hugeness, is to compare it to household income. (The Fed uses disposable income, which is annual income after taxes).

That debt-to-income ratio skyrocketed during the bubble. It has fallen during the bust, but, as of the start of this year, it was still way above where it was a decade ago.

Yearly Changes of Household Debt as a Percentage of Disposable Income

Then again, what really matters month to month for families is how much of their paycheck goes to paying off debt. As it turns out, that number tells a very different story.

Largely because interest rates are so low right now, the percentage of household income that goes to debt payments is actually lower now than it was a decade ago. That's a good sign — it suggests that, in a real, day-to-day way, monthly debt payments are less burdensome for families, on average, than they used to be.

Quarterly Changes in Debt Payments as a Percentage of Household Income

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