U.S. Household Debt Deleveraging Metrics Raise Worrisome Questions :: The Market Oracle :: Financial Markets Analysis & Forecasting Free Website

Household debt outstanding hit a peak of $13.9 trillion in the first quarter of 2008. This staggering amount of household debt was close to 100% of GDP of the nation (see Chart 1). Home mortgages and consumer credit make up household debt, with home mortgages accounting for roughly 75% of household debt.

A large part of the sharp accumulation in debt has occurred since the second-half of the 1990s. The median increase in household borrowing per year during 1953-2010 is $114.7 billion (see horizontal line in Chart 2). There was a gradual upward trend in household borrowing which exceeded the historical median in 1980s and 1990s; the outsized increase occurred during the ten years ended 2008. In other words, the atypical accumulation of debt which exceeded historical norms was spread over a span of ten years.

via U.S. Household Debt Deleveraging Metrics Raise Worrisome Questions :: The Market Oracle :: Financial Markets Analysis & Forecasting Free Website.

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