Americans shed almost a quarter of their non-mortgage debt this year, with older generations leading the charge in slashing financial burdens despite continuing inflationary pressures under President Trump’s administration.
Key Takeaways
- Americans in major metro areas reduced non-mortgage debt by 23.9%, bringing the median amount down to $18,762 from $24,668.
- Baby boomers made the most significant progress, cutting their debt by 45.3%, while Gen X still carries the highest burden at $26,207.
- Credit card debt remains widespread, affecting 70.2% of Gen Z and 92.6% of baby boomers, despite overall debt reduction.
- Total U.S. consumer debt reached $17.57 trillion in Q3 2024, with mortgage debt remaining the largest component.
- Student loan debt decreased by 16.8% due to federal loan cancellations, providing relief to many borrowers.
Debt Reduction Across Generations
A comprehensive LendingTree report reveals a remarkable trend in American finances: non-mortgage debt in the nation’s 100 largest metropolitan areas has plummeted by nearly a quarter over the past year. This dramatic reduction highlights a potential shift in consumer behavior as Americans prioritize debt reduction amid economic uncertainties. The report examines four generational groups, finding that each has made substantial progress in lowering personal, auto, student loan, and credit card obligations, though significant differences exist between age groups.
“Americans in 100 of the largest metros now have a median non-mortgage debt of $18,762 across four generations—baby boomers, Gen X, millennials, and Gen Z—which is down 23.9 percent compared to $24,668 last year,” LendingTree reported in their June analysis.
Despite this positive trend, there remains a clear generational divide in debt burden. Generation X (ages 45-60) continues to shoulder the heaviest financial responsibilities, with median non-mortgage debt of $26,207. This generation faces unique challenges, often supporting both aging parents and adult children while managing their own retirement planning. Millennials follow closely with $24,810 in median debt, while Gen Z carries $12,715 and baby boomers have reduced their obligations to $10,272.
Geographic Variations in Debt Burden
The LendingTree study reveals significant regional differences in debt load across generations. Gen X residents in El Paso, Texas, face the highest median non-mortgage debt at a staggering $40,709 – more than double the national median. Similarly, millennials in McAllen, Texas, struggle with $36,043 in debt, substantially above their generational average. These geographic disparities suggest local economic factors, including wage levels, cost of living, and employment opportunities, play crucial roles in debt accumulation.
“I think it’s a further sign that people are being cautious and looking to firm up their financial foundation amid all the economic uncertainty we’re facing today. They’re trying to focus on paying down high-interest debt and building their emergency fund. With that in mind, they may choose to put off bigger-ticket purchases such as cars and kitchen appliances,” said Matt Schulz.
For younger Americans, the debt picture varies dramatically by location. Gen Z individuals in North Port, Florida, carry the highest non-mortgage debt among their peers at $20,021, well above the national average for their age group. This geographic disparity highlights how regional economic conditions can significantly impact financial health, even among the youngest working adults who are just beginning to establish credit histories and take on financial responsibilities.
Types of Debt: Credit Cards Dominate While Student Loans Decline
Credit card debt remains pervasive across all generations, affecting between 70.2% of Gen Z consumers and an astonishing 92.6% of baby boomers. This universal challenge is particularly concerning given current high interest rates, which make revolving credit card balances increasingly expensive. Gen X residents in Bridgeport, Connecticut, face the highest median credit card burden at $8,656, highlighting the persistent problem of unsecured high-interest debt in certain regions.
Auto loans represent another significant component of consumer debt, with 51.5% of Gen X carrying vehicle financing at a median balance of $23,350. Meanwhile, student loan debt tells a more positive story, decreasing by 16.8% nationally due to federal loan cancellations. While Gen Z individuals are most likely to have educational debt, Gen X carries the highest median student loan balances at $33,988, reflecting the rising costs of education over decades and potentially the burden of financing children’s education.
“Overall debt levels remain elevated and delinquency continues to rise, albeit at a slower pace. However, consumers seem to remain well-positioned,” said Josee Farmer.
The Broader Debt Landscape Under Trump
While non-mortgage debt shows encouraging declines, total U.S. consumer debt reached $17.57 trillion in Q3 2024, marking a 2.4% increase from 2023. This apparent contradiction reflects the continued growth in mortgage debt, which increased by 4.2% as home values appreciate. The housing market remains a significant factor in overall American indebtedness, with mortgage obligations constituting the largest portion of consumer debt. Additionally, Home Equity Lines of Credit (HELOCs) saw a substantial 9.7% increase, suggesting homeowners are tapping into their property’s value.
Baby boomers deserve special recognition for their financial discipline, having reduced their non-mortgage debt by an impressive 45.3% – more than double the reduction achieved by other generations. This substantial improvement likely reflects their life stage advantages: established careers, potentially lower housing costs after years of payments, and fewer dependent family members. Their success provides an important example for younger generations about the possibility of significant debt reduction, even in challenging economic times.
