Since debt plays a central role on the ability for Americans to own their homes, drive their vehicles, and live day-to-day, it is safe to say that consumer debt, including debt relief, drives economic growth and forges the way of life in the United States. As the economy grows, and the prices of homes increase, the ability to pay down that debt – to the relief of many – becomes an obtainable feat. Here are 2013’s must-watch trends in consumer debt.

Looking Back on 2013 and National Consumer Debt

Throughout the first quarter of 2013, debt continued to decrease in most major US metropolitan cities, and in January of 2013, consumer debt was at $22,720 per household. According to the National Consumer Credit Trends Report from Equifax, national consumer debt decreased from $11.02 trillion to $10.92 trillion between the first quarter of 2012 to the first quarter of 2013 (1). Looking into housing debt, this decline is largely a reflection of the activity seen during this time: both mortgages being paid down by consumers and mortgage debts being written off. Total mortgage debt fell 3.1 percent to $8.4 trillion, however, during the same period of time, debt aside from mortgage debts increased by 7.1 percent to $2.5 trillion.

Throughout February and March of this year, consumer credit jumped a total of 11.3%, and by April it was reported that the average household was favoring loans over credit cards, pushing consumer credit up another 8.3% in May (2). Over the summer months of June and July, school and car loans drove the national consumer debt up, while credit card loans continued to decline. On July 25, Equifax reported a 27% decrease in first mortgage delinquency, from 5.7% to 4.14%. In August, the rising interest rates spurred an 8% increase in loans, but on August 1st, Equifax reported that severely delinquent first mortgages, which means mortgages with payments 90 days over due or under foreclosure, were at a five-year low (3).

2013 Trends in National Consumer Debt

By the end of October, the trends throughout the year of 2013 in relation to consumer debt were becoming all the more clear. First-mortgage write-offs were reported at a six-year low, with a decrease of 24.5%. Delinquency rates were also at an all-time low. In a press release, Equifax reported that “We’re now back to where we were in mid-2008 in terms of severely delinquent first mortgages and current trends suggest we will be at pre-recession levels of severe delinquencies by the end of 2014.” (4)

2013 proved itself to be a positive year when looking at consumer debt. Although there was a slight increase over the year on retail credit card debt for consumers, this was said to be a positive sign, as it is an indication of an increase in consumer confidence. Since consumer spending is an important part of a healthy economy, and with most consumer debt being focused on responsibly managing mortgage and car loans, these statistics show that the US economy is moving in the right direction.

(1) http://investor.equifax.com/releasedetail.cfm?releaseid=774223
(2) http://useconomy.about.com/b/2013/04/08/consumer-credit-jumps-7-8-in-february.htm
(3) http://investor.equifax.com/releasedetail.cfm?releaseid=780388
(4) http://investor.equifax.com/releasedetail.cfm?releaseid=800705