After the recession, many Americans began cutting back and slowly chipping away at their household debt. Unfortunately, this noble effort seems to have tapered off, according to a new University of Michigan study. In fact, according to the study, one in every five households now owes more in credit cards, medical bills, student loans and other debt than they have in savings and liquid assets. The proportion of families without any savings at all rose last year to 23.4%. In 2009, it was at 18.5%.
The study’s home ownership numbers don’t look any better. About 1.7% of families surveyed say that it is “very or somewhat likely” that they’ll fall behind on their mortgage payments soon. But that percentage did improve from 2009, when it was 1.9%.
“Our data suggest that the mortgage crisis will continue for the next few years, although a somewhat smaller share of families will experience distress,” said Frank Stafford, a coauthor of the study and an economist at the University of Michigan’s Institute for Social Research. Stafford and his colleagues interviewed the same 8,100 families before and after the economic downturn about their debt levels and finances.
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The drive to pay down debt has definitely waned over the last few years. The percentage of families who had $30,000 or more in credit card and other debt in 2009 (8.5%) rose in 2011 to 10%. And slightly fewer families had no debt in 2011 (47.4%) than in 2009 (48%).
The numbers are a distressing look at the consumer debt situation around the country. Many families are still trying to recover from the recession while also trying to keep pace with mortgage payments. The only ones that seem to have rebounded and are doing okay are those who have more than $50,000 in savings and liquid assets. In fact, a significantly higher percentage of households (14.6%) had that much in savings in 2011 than in 2009 (11.8%).