Being young doesn't mean you're debt free!Â Americans in their 20s on
average are carrying debt loads of $45,000, according to a survey
released Monday by PNC.
In its first PNC Financial Independence Survey, the financial services company found that, at different stages in their 20s, individuals might owe from $12,000 to $78,000.Â So what accounts for all that debt?
Education loans were the most frequently reported type of debt.Â Then, you guessed it, followed next by credit card, car loans and mortgages.Â The survey noted that the debt burden could get heavier quite quickly. The interest rate for the U.S. government's subsidized Stafford loan program, which covers more than 7 million students, is scheduled to increase to 6.8 percent from 3.4 percent July 1.Â Additionally, credit card companies are able to charge much higher interest rates now and interest rates are forecasted to increase as the economy gains steam.
"Twenty-somethings are challenged with a balancing act between saving for the future and paying down their debt," said Shannon Johnson, director, consumer checking and rewards, PNC.
What does all this mean for these Twentysomethings?Â It means those without strong income earning potential are likely to have to wait longer to qualify for a mortgage.Â And if they have to wait longer, then there is one less group of potential buyers to help fuel a housing recovery.Michael Hobbs, PahRoo Appraisal & Consultancy