Americans' debt hits 10-year low

American families' household debt has hit its lowest level in 10 years

American families’ debt has hit its lowest level in 10 years, according to a Wall Street Journal report.

Household debt, measured as a share of disposable income, hit a peak of 135% in late 2007, according to the Journal. That percentage had fallen to 108% in September – the lowest sustained level since 2003. It’s also far below average household debt in Britain, Japan and Canada. And with home values rising, Americans are comfortable borrowing more, which could provide a jolt to the economy going into 2015, the Journal reported.

While many American households have reduced their debt burdens by defaulting on loans, economists say that lighter debt burden is a key reason why the U.S. is now economically outperforming Japan and much of Europe, the Journal reported. And lower debt could give a jump-start to consumer spending, which accounts for two thirds of the nation’s economy.

As debt has eased, borrowing has risen, the Journal reported. Overall household borrowing rose at an annualized rate of 2.7% last quarter, up from a pace of 0.6% last year, according to the Journal. And mortgage debt rose at an annualized pace of 0.7% -- the first increase since Q3 of 2013.