Household Debt Service Levels Are at Historically Low Levels

Household Debt Service Levels Are at Historically Low Levels.

That would have been a useful piece of information to include in a Washington Post article on couples taking on debt to pay for the costs of their weddings. The piece told readers:

"Demand among Americans, who are already holding record levels of debt, for help financing weddings are giving rise to an industry of personal loans marketed specifically to brides and grooms."

While debt is at record levels, so are income levels and asset levels. It is pretty meaningless to tell readers that debt is at a record level without any context. The most relevant measure is the ratio of debt service, the cost of bearing the debt, relative to household income.

The ratio of debt service, or a broader measure that includes rent, is actually near its lowest point in the last forty years according to data from the Federal Reserve Board. This doesn't quite fit the story of a nation drowning in debt, although there are undoubtedly many households facing serious difficulties paying off their debts.