Some troubling if unsurprising news from a new study done by researchers at the University of Michigan.
More American families are drowning in debt.
One in five U.S. households owes more on credit cards, medical bills, student loans and other non-collateralized debts than they possess in savings and other liquid assets, say economists at the U-M Institute for Social Research.
The study also finds that the home mortgage issue doesn’t appear to be going away.
Some 1.7 percent of families surveyed last year say that it is either very likely or somewhat likely that they will fall behind on their mortgages in the near future. That’s actually down from 2009 when 1.9 percent of families said they were very or somewhat likely to fall behind. But it’s hardly out of the woods.
“Our data suggest that the mortgage crisis will continue for the next few years, although a somewhat smaller share of families will experience mortgage distress,” said Frank Stafford, one of the report’s co-authors.
He added that, “Even though average savings levels have gone up since 2008 … there has been no improvement in financial liquidity between 2009 and 2011, except among families with more than $50,000 in savings and other liquid assets.”
Some of the report’s noteworthy findings:
– The proportion of families with no savings or other liquid assets rose to 23.4 percent in 2011, up from 18.5 percent in 2009.
– About 3.54 percent of families owned a home and were behind on their mortgage in either 2009 or 2011, or both years. About 4.1 million families were affected.
– About 10 percent of families had $30,000 or more in credit card or other non-collateralized debt last year, up from 8.5 percent in 2009.
“Some families have not been able to make substantial headway,” Stafford said. “Even if they’re not underwater with their mortgages, they are struggling to save money and reduce their debts.”