Inflation affects household debt picture

By: M. Scott Morris
Published: November 13th, 2023

The Federal Reserve Bank of New York released its latest data on household debt, and WalletHub’s inflation-adjusted analysis revealed that U.S. households increased their debt by roughly $78 billion during Q3 2023. WalletHub adjusted the data for inflation to accurately show how debt compares to historical levels. Key highlights include

• Face value. Household debt is at a record high ($17.3 trillion), but when adjusted for inflation, the total is 7% below its peak from 2008. 
• Projection. U.S. households will end the year with $350-plus billion more debt than they started with, WalletHub projects. 
• Household average. The average household owed a total of $145,319 at the end of Q3 2023, only $13,631 below WalletHub’s projected breaking point for household finances. 
• Total debt-to-deposits ratio. The ratio between total household debt and deposits has been going down over the years, and it is still below pre-Covid levels as well as roughly 53% below the peak from the early 2000s. 
• Total debt to assets. The ratio between total household debt and assets has been dropping steadily, reaching 9.8% in Q3 2023, which is about 42% below the peak.

To see the full results of WalletHub’s Household Debt Report, click here.

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