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The debt degree of young American adults -- those under the age of 35 -- has taken a steep dive in the last ten years or so, according to a new study. Typically, that would sound like great news for the economy. In reality, however, it suggests a very troubling pattern. The reason that debt has dropped so sharply is because today's young adults have too few resources to consider taking on brand new loans. Source of article:
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Drop in debt degree of young adults



There was a decrease in the debt level of those under the age of 35 by 14 percent and a rise for those over 35 by 63 percent between 2001 and 2010. This was shown in the recent Pew Research Center study. That suggests that there is a weak economic growth, which has been occurring for over 10 years.



Between 2007 and 2011, the rate of young adults who owned a vehicle dropped to 66 percent, a seven point drop, and the rate of young adults who owned their houses dropped 6 points to 34 percent.



Economist Richard Fry suggested that young adults try to keep away from mortgages but end up not getting a house in the process.



People using school loans at increased rate


The only type of debt that was on the increase for young adults was student loan debt. In 2007, only about 33 percent of young adults were burdened with college loan debt. In 2011, that rate had grown to 40 percent.



Looking at job industry problems



Pew says the cause of the downward craze, however, is not because young people are becoming more adept at handling their debts. It is mostly as a result of declining job market. Young adults, many already hobbled by large student loan debts, are finding it harder to find good paying jobs, and are therefore in no position to take on greater debt. In 2010 and 2011, adults under the age of 35 suffered a 2 percent higher unemployment rate than those over age 35.



Evan Feinberg explained that young adults do not have the chance to consider a home loan when they do not have a job yet. Feinberg is the president of Generation Opportunity.



Other debt also declining



Another recent study by Demos found a comparable trend for the charge card debt of young adults. According to the study, adults between the ages of 25 and 34 halved the rate their credit card debt between the years 2008 and 2012. But likewise, that had more to do with high unemployment than it did to any improved acumen at handling their finances.



The middle class is dropping and the American dream is starting to disappear.



Sources



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