Rising debt is the new reality
Debt continues to be a major concern for households across North America. The Federal Reserve Bank of New York Center for Microeconomic Data found total household debt reached $17.29 trillion in the third quarter of 2023 in the United States. This upward trajectory has been going on since 2021 and is largely driven by mortgages, credit cards and student loan balances.
Canadian households also are in debt. In fact, according to CBC News, Canadians carried more debt in 2021 than people in any other G7 country, with the value owed more than the value of the country’s entire economy. As of the third quarter of 2023, Statistics Canada says the average household was spending around 15 cents of every after-tax dollar in service of debt, which equated to $2.9 trillion across the country.
Research from financial services company Northwestern Mutual found that, excluding mortgages, the average personal debt per individual in 2023 sat at $21,800, which was down from $29,800 in 2019. Recent data from TransUnion, a credit reporting agency, confirms that the average credit card debt across the U.S. has increased to $5,733 per cardholder.
Business Insider calculations based on the latest data show the average borrower in 2023 had a monthly mortgage payment of around $2,800 on a 30-year-fixed-rate mortgage. Canada Mortgage and Housing Corporation reported the average monthly payment on new mortgages in the first quarter of 2023 was $1,984, up 40 percent from 2019.
Individuals are being hit by high costs in all directions, which is compounding personal debt. Those concerned about their debt can speak with a financial professional as they seek to gain control of their finances.
