Debt Levels Fall, Net Worth Follows Suit | NBC New York

Debt Levels Fall, Net Worth Follows Suit

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    It's not an illusion, you really are broke.

    Sure, with the housing and stock markets in the tank, the country's net worth sank like a stone. On the flip side, Americans are lightening their debt burdens for the first time on record.

    U.S. households reduced their debt levels by 0.8 percent at an annual rate in the July-September period, the first drop on records that go back more than 50 years, the Federal Reserve reported today.

    For some perspective, if you owed $100 on your credit card in June, as of September you would have covered 80 cents of that nut.

    Leading the way was a third-quarter dip in mortgage debt of 2.4, the largest decline on record.

    In past periods of tight credit, mortgage and total household debt have never declined, although the debt growth usually slowed.

    But when the average households' net worth falls by 4.7 -- to $56.5 trillion – banks are gonna be less likely to float you some cash.

    The drop in household net worth marked the fourth straight quarterly decline since total family net worth hit an all-time high of $63.6 trillion in the July-September quarter of 2007.