The typical American household has been busily deleveraging since the onset of the recession. According to the federal government’s latest Survey of Consumer Finances, the share of families owing money in some form declined from 77% in 2007 to 74.5% in 2013, the lowest proportion since 1998. According to Moody’s Analytics, last year, just 43 percent of families carried mortgages, a smaller share than in any year since 1995. Consumers have also continued to reduce their demand for borrowing on their credit cards.
Between 2007 and 2010, the proportion of families carrying credit card balances declined to just 38%, the lowest level in the survey’s history. In 2007, 46% of families reported holding revolving credit card balances. The decline in credit card debt occurred across most demographic groups, but was concentrated among less affluent households. Education-related debt, however, has continued to gain in importance. In 1989, about 9% of families reported installment loans related to educational expenditures. By 2013, the share had more than doubled to 20%.
