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An Experian study published in early 2024 revealed that most of Americans’ consumer debt comes from mortgage and car payments. Will the same thing happen in 2025?
Mortgage debt makes up two-thirds of all consumer debt, according to the Experian study. Though it only grew 3.2% between 2023 and 2024, it was still $11.6 trillion as of Q3 2023. Much of the debt comes from “skyrocketing mortgage rates” which only started to decrease toward the end of 2023 (and are roughly 6% at the time of writing).
High mortgage rates discouraged many Americans from pursuing homeownership in 2023, and not much has changed in 2024, according to Bankrate. (RELATED: Christmas Dinner Costs Rose In 2024)
Vehicles, Debt & Geography
Auto loans became the second largest debt category in 2023, but sit at just one-tenth of the overall mortgage debt, Experian reported. Without concrete data released for 2024, its unclear whether this trend is still the case, but early reports suggest so.
Average debt balances rose in every state, according to the Experian study. Southern states saw far larger increases. Alabama, Florida, North Carolina, Oklahoma, South Carolina and Texas saw residents raise their total debt balances by 4%, while most of the rest of the country averaged 2.3% growth. (TAKE ANOTHER POLL: Do You Enjoy Traveling During the Holidays?)
“Consumers appear to be in a solid position to continue spending and supporting growth in 2024, even as the climb in credit card debt has some ringing the alarm,” says Joseph Mayans, Experian’s director of U.S. economics. “When adjusted to account for the rapid income growth over the last couple of years, overall debt loads still sit below their pre-pandemic levels and remain historically low.”
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