US Household Debt Hits 15-Year Record at $16.9 Trillion

Household debt in the United States has shot up to the highest measure since 2008, mostly on the heels of mortgage rates soaring amid rocketing inflation. This is the latest analysis, as published in a new report from WalletHub. Higher inflation, of course, leads to higher interest rates, and that means consumers pay more for everything, including home ownership.

The news is distressing, of course, as the last time household debt jumped this high, the US was in the middle of a financial crisis. Unfortunately, the $320 billion increase over the final three months of 2022 brought the annual total up to $17 trillion. While a 2.4% bump may seem incremental at first glance, this is actually the highest such measure in 15 years, and it equates to approximately $142,680 per US household, on average.

Mortgage debt, specifically, shot up $290 billion over the course of the last year, according to the WalletHub report. This marks the second-largest annual jump for this metric since the close of the Great Recession. In December (2022), the average mortgage debt in the US registered around $100,667. That is a little more than $12,000 than what analysts consider the “breaking point” for a mortgage, where it will be too expensive for most people.

Unfortunately, credit data does not look good across the board. Over the same three-month period, US consumer credit card balances also shot up, this time by $61 billion. With balances increased by 6.6% over the quarter, total US credit card debt is now up to an astonishing $986 billion. For reference, this is $61 billion more than the pre-pandemic record of $927 billion.

While the rise in the mortgage is certainly unfavorable, the second metric—average credit card debt—is far more concerning. Not only are folks using more credit, but they are also probably paying more for the privilege since the average credit card annual percentage rate (APR) has hit a record high of 19.14%. The record only goes back as far as 1985; and the previous record of 19% was set in July of 1991.