Consumer Financial Health

Last Update: March 2023

Debt

Balances

https://www.newyorkfed.org/medialibrary/interactives/householdcredit/data/pdf/HHDC_2022Q4

Aggregate household debt balances increased by $394 billion in the fourth quarter of 2022, a 2.4% rise from 2022Q3. Balances now stand at $16.90 trillion and have increased by $2.75 trillion since the end of 2019. This is the largest quarterly increase in 20 years.

• Mortgage balances shown on consumer credit reports increased by $254 billion during the fourth quarter of 2022 and stood at $11.92 trillion at the end of December, marking a nearly $1 trillion increase in mortgage balances during 2022.
• Credit card balances saw a $61 billion increase in the fourth quarter, surpassing the pre-pandemic high of $927 billion. Credit card balances now stand at $986 billion, after declining to $770 billion in 2021Q1. The increase in credit card balances last December from one year prior was the largest since records began in 1999.
• Auto loan balances increased by $28 billion in the fourth quarter, continuing the upward trajectory that has been in place since 2011.

Delinquency

Aggregate delinquency rates decreased in the fourth quarter of 2022 and remained low, with Increases in the share of balances that are 30- 59 days past due and declines in seriously delinquent balances

• 2.5% of outstanding debt was in some stage of delinquency, 2.2 percentage points lower than last quarter of 2019
• Transition rates into early delinquency for credit cards and auto loans increased by 0.6 and 0.4 percentage points, following similarly sized increases in the second and third quarters. Delinquency transition rates for mortgages upticked by 0.15 percentage points.
• About 99,000 consumers had a bankruptcy notation added to their credit reports in 2022Q4, unchanged from the previous quarter

Debt Service Payments as a Percent of Disposable Personal Income

The debt service ratio has increased 17% since the lows in 2021, but remains below the Q4 2019 levels.

Quarter	FOR	Total	Mortgage	Consumer
2018:1	14.86	9.88	4.20	5.68
2018:2	14.79	9.83	4.18	5.65
2018:3	14.75	9.81	4.15	5.66
2018:4	14.70	9.79	4.13	5.66
2019:1	14.66	9.78	4.12	5.65
2019:2	14.70	9.81	4.12	5.69
2019:3	14.70	9.82	4.10	5.72
2019:4	14.69	9.81	4.08	5.74
2020:1	14.61	9.75	4.04	5.70
2020:2	13.24	8.79	3.71	5.08
2020:3	13.74	9.10	3.83	5.27
2020:4	14.07	9.32	3.92	5.40
2021:1	12.57	8.33	3.48	4.85
2021:2	13.61	9.04	3.76	5.28
2021:3	13.73	9.14	3.78	5.36
2021:4	13.90	9.27	3.82	5.45
2022:1	14.27	9.53	3.90	5.64
2022:2	14.36	9.63	3.92	5.70
2022:3	14.49	9.75	3.99	5.76

Savings

Saving rate

Personal savings, as measured by the BEA, is the difference between personal income and personal outlays.

• The saving rate stands at 4.7%. The saving rate has come down significantly since the pandemic and, is currently even below the pre-pandemic levels of 8%.

Excess Savings

https://am.jpmorgan.com/content/dam/jpm-am-aem/global/en/insights/market-insights/guide-to-the-markets/mi-guide-to-the-markets-us.pdf

The Federal Reserve estimated that through the summer of 2021, U.S. households accumulated $2.3 trillion in excess pandemic savings. According to the Federal Reserves, they stood at $1.7 Trillion as of mid-2022, and recent reports from JPM estimate excess savings are $900 billion at the beginning of 2023.

According to BofA, lower-income households are expected to deplete their savings by the end of 2023, while upper-income households may exhaust their savings by the end of 2024 to 2025.

The primary driver of the excess savings for households in the top quartile has been their foregone consumption. In contrast, the primary driver of excess savings for the bottom half of the income distribution was the roughly $1.5 trillion in fiscal transfers received through the end of 2021. We can expect additional pressure on the lower income households since these fiscal transfers are no longer active.

Quarter Date	Bottom Quartile	Second Quartile	Third Quartile	Top Quartile
2020: Q1	10.291	16.642	25.170	45.470
2020: Q2	115.610	157.753	275.184	401.873
2020: Q3	113.590	175.001	368.898	656.234
2020: Q4	64.178	164.663	436.376	871.172
2021: Q1	167.467	275.347	583.372	1124.104
2021: Q2	170.190	275.762	598.222	1209.464
2021: Q3	170.636	290.802	612.837	1197.149
2021: Q4	150.395	296.197	610.635	1140.595
2022: Q1	123.525	285.320	572.589	996.099
2022: Q2	92.129	268.337	523.747	825.409

Wealth

• Net Worth is still 23% above Q4 2019
• Net worth has come down 5% since all-time high in Q4 2021, driven primarily by losses in corporate equity.
• The wealth effect creates the psychological effect that the increase/decrease in asset values has a direct impact on consumer spending, more importantly, real state values. However, since wealth destruction is still only 5%, and real state is still growing, this wealth effect is more likely still very limited.

Quarter (US$ Billions)	Net Worth	Total assets	Total liabilities	Nonfinancial assets	Financial assets	Nonfinancial assets: Real estate	Nonfinancial assets: Consumer durables	Nonfinancial assets: Nonprofits nonfinancial assets	Financial assets: Deposits	Financial assets: Directly held stock	Financial assets: Indirectly held stock	Financial assets: Directly held debt securities	Financial assets: Indirectly held debt securities	Financial assets: DB entitlements	Financial assets: Noncorporate businesses	Other financial assets
2022:Q3	143,278.39	162,512.81	19,234.42	54,791.94	107,720.87	41,909.00	7,639.27	5,243.66	18,409.39	24,328.59	12,408.65	4,305.93	5,046.57	17,136.45	16,946.80	9,138.50
2022:Q2	143,670.37	162,584.60	18,914.23	53,809.28	108,775.33	41,193.92	7,493.63	5,121.72	18,422.83	25,424.00	13,256.64	3,594.13	5,329.77	17,040.56	16,553.56	9,153.84
2022:Q1	149,953.84	168,507.64	18,553.80	52,174.40	116,333.24	39,738.07	7,364.06	5,072.27	18,542.54	30,545.35	16,072.10	3,305.25	5,799.53	16,945.86	15,942.37	9,180.25
2021:Q4	150,122.13	168,481.01	18,358.88	50,337.42	118,143.59	38,113.35	7,121.62	5,102.44	18,347.62	31,940.73	17,461.39	2,883.38	6,133.28	16,849.06	15,531.14	8,996.99
2021:Q3	145,305.86	163,274.58	17,968.72	48,629.18	114,645.40	36,820.63	6,885.16	4,923.40	17,718.92	30,740.81	16,299.63	3,294.77	5,856.11	16,750.82	14,901.25	9,083.10
2021:Q2	142,158.80	159,818.04	17,659.24	46,812.97	113,005.07	35,557.80	6,626.07	4,629.11	17,532.38	30,468.06	16,537.87	3,192.26	5,956.70	16,651.85	13,959.00	8,706.96
2021:Q1	136,219.57	153,538.67	17,319.11	44,957.30	108,581.37	34,185.96	6,270.84	4,500.50	17,366.30	28,161.07	15,534.38	3,338.81	5,802.15	16,554.16	13,293.10	8,531.41
2020:Q4	131,344.27	148,465.59	17,121.32	43,580.87	104,884.73	32,996.44	6,134.42	4,450.01	16,351.16	26,122.95	14,847.55	3,936.80	5,783.30	16,456.67	12,948.12	8,438.19
2020:Q3	122,606.09	139,444.41	16,838.31	42,333.19	97,111.22	32,052.78	5,984.17	4,296.24	15,608.93	22,141.28	13,111.14	3,537.49	5,578.86	16,367.81	12,527.43	8,238.28
2020:Q2	118,235.93	134,808.30	16,572.38	41,327.73	93,480.58	31,322.96	5,789.61	4,215.16	15,436.67	20,059.78	12,284.10	3,743.79	5,294.62	16,280.72	12,197.76	8,183.14
2020:Q1	110,448.13	127,012.91	16,564.78	40,626.03	86,386.88	30,625.59	5,773.97	4,226.46	14,269.45	16,394.01	10,148.31	4,165.27	4,953.61	16,194.82	12,095.23	8,166.18
2019:Q4	116,539.28	133,038.93	16,499.66	39,876.91	93,162.03	29,992.43	5,731.41	4,153.07	13,360.35	21,081.55	13,172.34	4,369.38	5,288.44	16,114.27	11,902.23	7,873.46

Changes in Net Wort

Quarter	Total change (US$ Billions)	Direct and indirect holdings of corporate equity (US$ Billions)	Direct and indirect holdings of debt securities (US$ Billions)	Real estate (US$ Billions)	Other (US$ Billions)
2022:Q3	-391.98	-1,943.405	428.599	819.728	303.098
2022:Q2	-6,283.468	-7,936.804	-180.873	1,484.586	349.623
2022:Q1	-168.293	-2,784.675	88.108	1,576.526	951.747
2021:Q4	4,816.269	2,361.682	-134.212	1,454.972	1,133.826
2021:Q3	3,147.061	34.508	1.927	1,542.875	1,567.752
2021:Q2	5,939.235	3,310.484	7.995	1,496.949	1,123.807
2021:Q1	4,875.295	2,724.95	-579.143	1,228.297	1,501.191
2020:Q4	8,738.176	5,718.081	603.75	1,087.468	1,328.877
2020:Q3	4,370.167	2,908.532	77.942	804.539	579.154
2020:Q2	7,787.798	5,801.565	-80.471	677.348	1,389.357
2020:Q1	-6,091.147	-7,711.573	-538.944	696.367	1,463.003
2019:Q4	3,696.939	2,482.631	202.896	328.202	683.21

Wealth By Percentile

• In the third quarter of 2022, 68 percent of the total wealth in the United States was owned by the top 10 percent of earners. In comparison, the lowest 50 percent of earners only owned 3.3 percent of the total wealth.
• According to the 2021 Census, the median household wealth in 2020 was $140,800. The 10th percentile of household wealth was –$1,450, meaning one in ten households had wealth of –$1,450 or less. The 90th percentile of household wealth was $1,410,000, meaning one in ten households had wealth exceeding $1.41 million.

Date	Top 0.1%	99-99.9%	90-99%	50-90%	Bottom 50%
1989:Q3	8.6	14.1	37.3	36.2	3.8
2022:Q3	12.5	18.1	37.4	28.7	3.3