The Census Bureau has updated its household debt and wealth numbers to include the year 2011. The comparison period is 2000-2011. I've written enough this week, and these charts mostly speak for themselves. I don't have to tell you what this means. You already know what it means.
Secured debt is debt backed by collateral (a house or car). Median household debt is lower than secured debt since not every household holds secured debt. The "good news" was that the percentage of households with debt declined from 74% to 69%. Break out the champagne! Also note that in the top graph, the Y-axis scale has been compressed so the negative change doesn't look so dramatic. Just the opposite was done in the bottom graph to better show the positive change. Click to enlarge.
Note that net worth (wealth) follows the Case Shiller Home Price Index because home equity is by far the largest source of wealth in ordinary (non-wealthy) households. Without home equity, household median net worth never changes much—it's always somewhere around $20,000 (in 2011 dollars). Click to enlarge.
Have a nice weekend.
It's Money That I Love
So, some people defaulted on mortgages and/or walked out of underwater homes, so fewer households have debt, but the median net worth continues to decline. I'm encouraged. A few more trillions printed by the Fed, and we'll have this economy "back on track".
Posted by: JohnWDB | 03/22/2013 at 02:58 PM