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Measuring Mortgage Debt

debtAmericans are experiencing higher levels of consumer confidence alongside increased credit balances, and a recent report takes a look at how credit and debt has shifted since the 2008 financial crisis.

“We’re continuing to see the positive effects of economic recovery, especially among younger consumers,” said Michele Raneri, VP of Analytics and Business Development at Experian. “Since the recession, responsible credit card behaviors and lower debt among younger consumers is driving an upward trend in average credit scores across the nation. Over the last ten years, those 18 to 21 increased their credit scores by 23 points on average compared to those 18 to 21 ten years ago.”

According to the report, the average mortgage debt increased from $191,357 in 2008 to $208,180 in 2018, however, delinquency rates dropped within that time. In the ten years since the financial crisis, average 30 days past due delinquency rates dropped from 5.4% to 3.9%. Additionally, average 60 days past due delinquency rates dropped from 2.9% to 1.9% in that time, and average 90 days or more past due delinquency rates dropped from 7.1% to 6.7%.

Older Americans, aged 72 and up, saw the biggest increase in mortgage debt, up $29,602 for a total of $160,735 in 2018 since 2008. Younger age groups saw smaller increases in mortgage debts, with consumers aged 22 to 35 increasing their average mortgage debt from $192,554 in 2008 to $209,713 in 2018.

Year over year, 2018 saw the biggest increase in credit since the financial downturn, despite the fact that credit scores are still lower than they were before the crisis. Overall, the nation's average credit score is 680, five points higher than the 2017 average of 675.

"With this annual report, our goal is to provide insights that help consumers make more informed decisions about credit use to change their financial habits and improve financial access," said Rod Griffin, Director of Consumer Education and Awareness at Experian. "Understanding the factors that influence their overall credit profile can help consumers lead financially empowered lives."

About Author: Seth Welborn

Seth Welborn is a Reporter for DS News and MReport. A graduate of Harding University, he has covered numerous topics across the real estate and default servicing industries. Additionally, he has written B2B marketing copy for Dallas-based companies such as AT&T. An East Texas Native, he also works part-time as a photographer.

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