Young Americans Have Less Debt, Less Assets
Young Americans have less debt than before, but lower debt levels come at the expense of lower asset ownership. The Pew Research Center finds that Americans aged 35 or younger are putting off major purchases like cars and houses, both of which are keeping young Americans from less debt than they had in 2007.
The median change in debt for those under 35 fell by some 29% since 2007, whereas the decline for households with an adult 35 or older was only 8%. Meanwhile, younger households are also more likely to have no debt. The study indicates that 78% of households with a head of household younger than 35 years old report having some debt. Only 39% have credit card debt, down from nearly half in 2007.
Student loan debt was the only category in which debt levels increased. Student debt accounted for 15% of all debt, which was a near-doubling from 2007 levels. Also, more households reported having student loan debt, with two of five younger households reporting some levels of federal or private college loans.
Median credit card balances among this demographic feel to $1,700 in 2010, which was down significantly from $2,100 in 2007. Vehicle loans also decreased from $13,000 to $10,000.
All in all, younger Americans are finding it easier to finance their debt levels than they were just a few years ago. Debt to income levels, a measure of financial well-being, were down to 1.46 from 1.63. Lower interest rates also make debt less expensive than before.
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