Debt Management

Household Debt Report

U.S. households increased their total debt by $271 billion during Q4 2023 – roughly 19% more than the average for Q4 over the past 20 years

In order to get a better understanding of the current household debt situation and how it compares to the past, WalletHub uses the latest data from the New York Fed but adjusts it for inflation. Adjusting for inflation is key, as it accurately shows how debt compares to historical levels. Access the complete report findings and infographics here.

The Federal Reserve Bank of New York just released its latest data on household debt, and WalletHub’s inflation-adjusted analysis revealed that while U.S. households owe a record amount in absolute terms ($17.5 trillion), the total is still 5% below the all-time high when you adjust for inflation. WalletHub’s Household Debt Report adjusts data for inflation to accurately show how debt compares to historical levels.

U.S. households increased their total debt by $271 billion during Q4 2023 – roughly 19% more than the average for Q4 over the past 20 years. As a result, U.S. households collectively owed $17.5 trillion to start 2024.

Key Findings:

  • Year-End Debt: U.S. households ended 2023 with $38 billion more debt than they started with, which is actually an 89% improvement from the prior year.
  • Household Average: The average household owed a total of $146,084 at the end of Q4 2023, only $12,216 below the peak.
  • Total Debt to Deposits Ratio: The ratio between total household debt and deposits has rebounded lately after going down for years, but it is still below pre-Covid levels as well as roughly 46% below the peak from the early 2000s.
  • Total Debt to Assets: The ratio between total household debt and assets has been increasing recently, reaching 10.3% in Q4 2023, but it’s still well below the record.

Q&A With WalletHub Editor John Kiernan

What does the latest Fed data tell us about household debt?

“The latest household debt statistics from the Federal Reserve Bank of New York paint a somewhat grim picture, showing that we collectively owe a record $17.5 trillion across all of our credit cards, mortgages, auto loans, personal loans and more. For context, U.S. GDP is about $27 trillion per year, and the government spent a total of $6.13 trillion in fiscal year 2023. But when you adjust household debt for inflation, things don’t look quite as bad. The inflation-adjusted total is actually 5% below the all-time record set in 2008. The situation is far from ideal, to be sure, but it’s not unprecedentedly bad.”

Is this amount of household debt sustainable?

“We’ve added a total of $366 billion in debt over the past two years, and we obviously can’t keep that up, especially with interest rates as high as they are right now. The good news is we actually added about 89% less debt in 2023 than we did in 2022, and current debt levels are more affordable than you might think, considering favorable debt-to-assets and debt-to-deposit ratios. Both metrics are currently around 40% better than their worst readings.”

What can households do to reduce their debt?

“Households with a lot of debt need to focus on the fundamentals of budgeting and saving. These things are a lot easier said than done, but people really do need to get a better sense of how much they’re spending each month, what they’re spending it on, and what can be reduced or eliminated to make room for debt payments and emergency fund contributions. If you have a good or excellent credit score, you might also be able to reduce the cost of your debt with a 0% balance transfer credit card or a low interest personal loan. Beyond that, make an effort to focus on your overall financial health moving forward, and that includes your income. People often get so caught up in their credit score and how they can cut expenses that they neglect other aspects of their finances, which can be at least as important in a lot of cases.”


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