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A Look at US Regional Average Consumer Debt and Hot Spots to Keep an Eye on in 2014

Posted By:  |  January 8, 2014  |  0 Comment(s)

us regional average consumer debt

With the recent economic recession still vivid in the nation’s memory, Americans in every part of the country are watching major economic markers for signs of improvement. One major economic metric, the average consumer debt, is an important statistic for those seeking debt relief. Consumer debt refers to the amount of debt that a private individual has. Types of consumer debt include payday loans, student loans, and credit card debt. When you’re seeking debt relief, it helps to know where you stand in relation to the average consumer debt in your area—being ahead of the game can be a strong motivator and encouragement to keep going, while falling behind can stress the reality of your situation. Here are the regional consumer debt statistics that Americans must watch, and locations of anticipated changes in 2014.

2013 Q3 Consumer Debt: The Largest Increase in Five Years

In November 2013, Reuters reported figures compiled by the Federal Reserve Bank of New York that demonstrate just how dire the consumer debt situation is. The New York Fed reported a consumer debt increase of 1.1 percent in the third quarter of 2013. This was the largest increase in a single quarter since early 2008. The mortgage crisis and Wall Street crash, and ensuing recession, are major factors in this jump in debt.

The New York Fed specifically points to the extreme increase in student debt as one particular area of concern. Reuters reports a third-quarter student debt of $1.03 trillion, compared to $33 billion in the second quarter. Nearly 12 percent of student loans in repayment were three months overdue.

Car loan debt saw a $31 billion increase in Q3, and credit card debt crept up by $4 billion. Mortgage debt also saw a major jump, with an increase of $56 billion.

In spite of this increased debt, however, Americans are still managing to pay it down. Household delinquency for all debts fell by 0.2 percent in Q3, though one might question whether this is a statistically significant change. (1)

Average Consumer Debt by Region: The Highs and Lows

Non-housing consumer debt in New York saw a median borrower balance of $8,450, compared to $8,800 in New Jersey and $8,600 in Connecticut, as of March 2013. All three states have a delinquency rate around 12-13 percent. (2)
This is about on average with states like Florida and Nevada.

According to the New York Fed Q1 numbers for 2013, the total debt balance per capita stayed about the same or fell in Illinois, New Jersey, Texas, Ohio, Pennsylvania, Florida, Michigan, Nevada, California, New York, and Arizona, as did the national average. Florida and Nevada had the largest proportions of 90-day late delinquency per capita out of 11 states surveyed, both of which were around 12 percent. Texas and Pennsylvania had the lowest concentration of 90-day late delinquency, around 5 percent of all consumer debt. (3)

This means it will be important to keep an eye on Florida and Nevada for signs of this delinquency trend reversing, and it will also be important to pay attention to Texas and Pennsylvania to understand why their debt per capita and delinquency rates fell. Analyzing their economies could lead to insights that can be turned into state consumer debt reduction initiatives.

With the economy still recovering, consumer debt is on the rise. 2013 Q3 saw the largest consumer debt increase of the last five years, and debt is increasing in states like Florida and Nevada. Although debt reductions are occurring sporadically, these reductions are not enough to counteract the sluggish economy and growing delinquency rates. Overall, the consumer debt in various states is increasing, though Americans are still, miraculously, finding ways to pay it off. Texas and Pennsylvania appear to be managing consumer debt quite well, with a very low delinquency rate. The post-recession years have been shaky, but as households are managing well enough, 2014 could see improvement.

(1) http://www.reuters.com/article/2013/11/14/us-usa-fed-consumerdebt-idUSBRE9AD0W920131114
(2) http://www.newyorkfed.org/regional/regional-indicators-of-consumer-debt/

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