Younger Adults Now Have Less Debt But Fewer Assets

February 21, 2013, Written By John H. Oldshue
Younger Adults Now Have Less Debt But Fewer Assets

Young adults are carrying less debt than before the start of the 2008 recession, primarily because they own fewer major assets.

A new analysis from the Pew Research Center released today shows that Americans under the age of 35 are putting off high-dollar purchases like automobiles and houses.

The median debt of households led by an adult under 35 fell by 29% from 2007 to 2010. For households led by adults 35 and older, the decline was only 8%.

The share of younger households with debt of any kind dropped to 78%, the lowest level since the government began collecting this data thirty years ago. The share of young adults with credit card debt dropped to 39% in 2010 from 48% in 2007.

While overall debt declined, debt from student loans was the only major type of debt to increase. Student debt accounted for 15% of the total debt for young adults in 2010, up from 9% in 2007. 40% of young households had student loan debt in 2010 compared to 34% in 2007. Surprisingly, the median amount owed by households with student debt fell from $14,102 in 2007 to $13,410 in 2010.

The study also showed:

  • 34% of younger household owned their primary residence in 2011, down from 40% in 2007. The median outstanding amount of residential property debt owed dropped from $150,000 in 2007, to $128,000 in 2010.
  • In 2007, 73% of households headed by an adult younger than 25 owned or leased at least one vehicle. This dropped to 66% in 2011. In 2010, 32% of younger households had vehicle debt, down from 44% in 2007. The typical outstanding amounts owed on an auto dropped from $13,000 in 2007 to $10,000 in 2010.
  • The median outstanding credit card balance has dropped to $1,700 in 2010 from $2,500 in 2001 and $2,100 in 2007.
  • The debt-to-income ratio of younger adult households more than doubled from 1983 to 2007, when it peaked at 1.63. It fell back to 1.46 in 2010.

Pew used the Federal Reserve Board’s Survey of Consumer Finances for its analysis of household debt, and 2010 is the most recent year available. The home ownership tallies are based on the American Community Survey. Vehicle ownership relies on the Consumer Expenditure Survey.

The information contained within this article was accurate as of February 21, 2013. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.

About John H. Oldshue

John Oldshue is the creator of He worked for over 15 years in television and won an Emmy award for his reporting. He covers credit card rate issues for
View all posts by John H. Oldshue