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American household hit a record $16.9 trillion at the end of 2022, up $2.75 trillion since 2019, according to the Federal Reserve. If you had to write that check it would read $16, 960, 000, 000, 000.
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Americans owe $986 billion on credit cards, surpassing the pre-pandemic high of $927 billion. We owe $11.92 trillion on mortgages, $1.55 trillion on vehicle loans and $1.60 trillion for student loans.
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With average consumer in America on the rise, it’s no surprise that delinquency – missed payments of 30 days or more – has increased for nearly all types.
Who is most likely to get into ? More importantly, who is most likely to get out of ? Age, income, ethnicity, family type and education all play apart. Demographics, however, don’t strictly determine risk.
Understanding statistics and what’s behind them will help you manage your finances, get out of and find financial liberty. To get you started, here’s a look at statistics in America.
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Supply chain issues began during the earliest days of the COVID-19 pandemic. A shortage of workers, restricted work hours, and companies closing (either temporarily or for good), meant less “supply.”
A major issue resulting in a large part from supply chain issues was inflation. When prices for goods rise rapidly, it costs more to get through the day, feed your family, pay for heat and electricity, and more.
Obviously, inflation and supply chain shortages have a big impact on household . The impact comes from both ends – cars, houses, and other big-ticket items are more expensive, making loans to buy them cost more. The other impact is that the more everyday things like food and clothes cost, the more people have to turn to credit cards.
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Inflation peaked at 8% in the summer of 2022, a 40-year high. While it is slowly easing, the ripple effect on the average consumer’s budget continues.
When the amount American consumers owe for auto loans and mortgages began to level off, the amount they owed on credit cards spiked. Delinquency rates dipped during the COVID-19 pandemic, but by the end of 2022, about 2.5% of American was in delinquency, climbing toward the 4.7% it had been just before the pandemic hit.
While anyone can get into and have trouble paying their bills, the latest American statistics show that younger people are falling behind faster and going into delinquency, particularly on credit cards and auto loans.
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Here’s a look at how much nonmortgage Americans have by age group, and the average non-mortgage per capita for each group:
To income ratio is a key indicator of financial health. It’s determined by taking your monthly expenditures and dividing that number by your monthly income.
For instance, if your bills amount to $5, 000 a month and you make $7, 500 a month, your DTI is 66%. It also means you are dire need of financial overhaul.
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The maximum DTI to qualify for a mortgage is usually 43%. Most financial advisors recommend keeping your DTI at 30% or lower.
The median household income as estimated by the U.S. Department of Housing and Urban Development was $90, 000 in 2022. That’s for a household. The median individual income in for Americans in 2022 was $56, 368. Median means that half had a higher income, half had a lower income. The average American household load, including mortgage, is $101, 915.
Year-to-year DTI statistics are hard to come by, but given the rise of versus the rise in income, it’s apparent that Americans in all demographic groups have higher -to-income ratios.
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The wealthier you are, the more likely you will carry . Of course, the wealthier you are, the easier it is to erase that . The lower your income, the more of it goes to paying .
The median income for the top 1% in the U.S. in 2022 was $570, 003; the top 10% made a median $212, 110; the lowest 25% made $34, 429 and the lowest 10% made $15, 640.
U.S. consumers with children have from 14%-51% more total than the national average, and their credit scores are lower than the national average, a study by credit reporting agency Experian found.
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The study found that families with four or more children had 51% more than the national average in . The number decreased slightly as number of children decrease, but even one child will put a family 14% over the national average.
The study found that balances for credit cards and auto loans rose exponentially with the number of children. The one category in which balances didn’t increase was student loans, the premise being that by the time people are having kids, most of them are done paying for an education.
That said, everyone’s financial situation is different. The single guy next door may work 16 hours a day, have huge student loan payments and struggle to keep up with bills. The family with four kids on the other side may be high earners with wealthy backgrounds who didn’t have to take out student loans and pay off their credit card balances every month. You never know.
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Though it does make sense that the more non-earning people in a home (namely, children), the more expenses the home will have. The more earning people (a couple vs. a single person), the more income there will be to pay bills and shoulder the mortgage together.
Credit scores and credit history have a big impact on what’s available for American consumers to borrow, and how much that loan will cost. Numerous studies have found there are racial disparities in lending, credit reporting and scoring that end up being a catch-22 for Black and Hispanic borrowers. Having a mortgage and credit helps build a credit history that allows more favorable borrowing. If you can’t get credit, you can’t build the history.
Black and Hispanic borrowers on average have lower credit scores than white consumers, so their choices are limited. It’s even worse for Native American borrowers, who are largely credit invisible, a study by the Urban Institute found.
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The average credit card balance for white families was $6, 940 in 2021, the most recent figures available that break down by race. For Black families, it was $3, 940, and for Hispanic families it was $5, 510.
But the median -to-asset ratio for white families is 26.5%, while it was 46.8% for Black families, 46.2% for Hispanic families and 37.3% for other non-white races and ethnicities, an Employment Benefits Institute study found.
Assets include income, property and other elements that form a family’s wealth. Earlier we talked about -to-income ratio. -to-asset ratio is similar, but also takes into account property, which can be used to enhance wealth.
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A higher a -to-asset ratio has the same impact a lower credit score has on borrowing, meaning there are fewer options, and what’s available often is more expensive.
In 2021, the median income for white (non-Hispanic) households was $77, 999, for Black households, it was $48, 297; for Latino households, it was $57, 981, and for Asian households it was $101, 418.
When it comes to mortgages, the median amount was $130, 000 for white borrowers, $116, 000 for Black borrowers and $130, 000 for Hispanic borrowers, according to the Aspen Institute. The amount owed, though, doesn’t tell the whole story. Black, Latino, and Native American homeowners have mortgages that are often higher-cost and risker than those made to white borrowers, because they are based on assets, credit history and other factors. While white households borrow more heavily, they also have higher incomes, which means it’s easier to pay the larger loans, the study said.
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That’s when non-white households can get a mortgage. While lenders can’t legally deny applicants on the basis of race, they use factors like credit score to deny more applications for Black, Hispanic and Native borrowers than for white borrowers, the Urban Institute found.
Student loan also disproportionately affects people of color. An Investopedia analysis determined that among populations, Black, Hispanic, and Native American borrowers generally had higher unmet financial needs, incurred more student loan , and were more likely to struggle financially to stay in school. Black, Hispanic and Native American students most borrow more money to go to school, get less favorable rates, and owe more when they get out. As we explore later in this article, student loan can have a long-term impact on financial health.
Women have made huge economic gains over the decades, but most have more than men. In 2022, women earned 82.9 cents for every dollar earned by men, according to the U.S. Bureau of Labor
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