The press release noted that “household debt reached $12.73 trillion in the first quarter of 2017 and finally surpassed its $12.68 trillion peak reached during the recession in 2008.” And that set off lots of speculation that a financial crisis could be just around the corner.
While the 2017 Q1 dollar figure is indeed higher than the peak reached in 2008, household debt as a percentage of GDP at 66.9% is considerably below the 87.1% peak of 2008.
In other words, households are not nearly as leveraged as they were in the run-up to the financial crisis.
The NY Fed’s report contains a wealth of data on household debt and credit. One thing I found interesting is how the composition of household debt has changed over the past several years. Altering the Fed’s above graph to show percentage of household debt by category gives us this:
While mortgage debt remains the largest component, as a percentage of household debt it is now at 67.8%, down from over 73% in 2008, and below where it was in 2003. Student loans now account for over 10% of household debt, over three times its percentage in 2003.
Update: at the request of reader “MetroGuy”, I’ve added this chart showing household debt as a percentage of personal income, rather than as a percentage of GDP:
The pattern is much the same, with the latest figure household debt as a percentage of personal income (77.5% as of 2017 Q1) down considerably from the peak (103.9% in 2009 Q1) and now back down to 2003 levels.