Visualization of the world population in 2020, by age group
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The briefing
- Generation X is, on average, the most indebted generation with $ 140,643 in household debt
- Younger generations are seeing their debts grow faster compared to older Americans
Visualization of US household debt by generation
2020 can be classified as a year in which debt grew across the board. In the US, every generation except the silent generation has seen an increase in debt over the past year.
But how much debt does each generation household have?
| generation | 2019 | 2020 | Growth (%) |
|---|---|---|---|
| Generation Z (18-24) | $ 9,593 | $ 16,043 | 67.2% |
| Millennials (25-40) | $ 78,396 | $ 87,448 | 11.5% |
| Generation X (41-56) | $ 135,841 | $ 140,643 | 3.5% |
| Baby Boomers (57-75) | $ 96,984 | $ 97,290 | 0.3% |
| Quiet Generation (76+) | $ 43,255 | $ 41,281 | -4.6% |
Gen X are the most indebted Americans, followed by the baby boomers. The breakdown of debt by age group suggests that as the typical American grows up, their debt increases to a certain age when it begins to decrease.
Download generation report (.pdf)
Deep trench
The types of debt vary in importance for each generation. For example, the main source of debt for Gen Z and Millennials are student loans (20%) and credit card bills (25%). Mortgages, on the other hand, are the main source of debt for Gen X (30%) and Baby Boomers (28%).
Together, American households have a mountain of debt $ 14.5 trillionwith mortgages making up the majority at 70%.
This is how home mortgages are broken down by generation.
| generation | Share of mortgage debt |
|---|---|
| Silent generation | 4.8% |
| Baby boomers | 29.0% |
| Generation X | 42.0% |
| Millennials | 24.2% |
| Generation Z | – |
Given that mortgages account for the largest share and Generation X is the most heavily indebted household, it stands to reason that Generation X has the most mortgage debt of all generations at 42%.
Editor’s Note: It should be noted that the Federal Reserve is still including Gen Z in some of its data.
Zoom out
Although most US household debt is increasing, it still pales in comparison to other countries. This is how US household debt ranks internationally.
| Country / Territory | Household debt to GDP ratio (September 2020) |
|---|---|
| 🇨🇠Switzerland | 131% |
| 🇦🇺 Australia | 122% |
| 🇳🇴 Norway | 112% |
| 🇩🇰 Denmark | 112% |
| 🇨🇦 Canada | 110% |
| 🇳🇱 Netherlands | 104% |
| 🇰🇷 South Korea | 101% |
| 🇳🇿 New Zealand | 95% |
| 🇸🇪 Sweden | 93% |
| 🇬🇧 United Kingdom | 89% |
| ðŸ‡ðŸ‡° Hong Kong SAR | 88% |
| 🇺🇸 USA | 78% |
The US ranks 12th in global household debt to GDP ratio.
Aside from the US being the largest economy by GDP, US GDP per capita remains one of the highest of the large countries, suggesting that this high level of debt is partially offset by high incomes across generations.
looking ahead
The rising debt was manageable due to the low interest rate environment. This has been going on for well over a decade and is likely to remain so in the near future.
It is still largely unknown whether this can last in the long term.
Where does this data come from?
Source: Federal Reserve, Experian
Remarks: Household indebtedness to GDP data as of September 2020
