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The Graying of American Debt

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Abstract

The U.S. population is aging and so are its debts. In this post, we use the New York Fed Consumer Credit Panel, which is based on Equifax credit data, to look at how debt is changing as baby boomers reach retirement age and millennials find their footing. We find that aggregate debt balances held by younger borrowers have declined modestly from 2003 to 2015, with a debt portfolio reallocation away from credit card, auto, and mortgage debt, toward student debt. Debt held by borrowers between the ages of 50 and 80, however, increased by roughly 60 percent over the same time period. This shifting of debt from younger to older borrowers is of obvious relevance to markets fueled by consumer credit. It is also relevant from a loan performance perspective as consumer debt payments are being made by older debtors than ever before.

Suggested Citation

  • Meta Brown & Donghoon Lee & Joelle Scally & Katherine Strair & Wilbert Van der Klaauw, 2016. "The Graying of American Debt," Liberty Street Economics 20160224, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednls:87105
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    More about this item

    Keywords

    Repayment; Aging; Household debt;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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