Lessons in Thrift Are Sinking In, Pew Says

NEW YORK (TheStreet) -- Young adults appear to have got the message: Debt is best kept to a minimum.

Or have they?

It's hard to know how people under 35 would behave if their economic condition were better. But there are some signs they've taken to heart the difference between good debt and bad debt.

"After running up record debt-to-income ratios during the bubble economy of the 2000s, young adults shed substantially more debt than older adults did during the Great Recession and its immediate aftermath -- mainly by virtue of owning fewer houses and cars," says a study of government data by the Pew Research Center.

"From 2007 to 2010, the median debt of households headed by an adult younger than 35 fell by 29%, compared with a decline of just 8% among households headed by adults ages 35 and older. Also, the share of younger households holding debt of any kind fell to 78%, the lowest level since the government began collecting such data in 1983."

People younger than 35 carried a median of $15,473 in debt in 2010, compared with $21,912 in 2007. For people 35 and older, the debt load fell less sharply during that period, to $30,070 from $32,543.

A cynic might say, well, that's just because lenders have been tougher on people who don't have strong credit histories, which take years to build. Also, the young have been particularly hard hit by unemployment and worries about job security, so they're less likely than in previous years to be buying homes and cars. Both factors probably account for some of the debt decline.

Also, even those who do want to buy homes and can qualify for a mortgage may have been scared off by the weak housing market. No one wants to buy a home that might be worth less a year later, so some young people are remaining renters longer. Among those under 35, the share that owned their primary residence fell from 40% in 2007 to 34% in 2011.

It's not clear, then, that carrying less debt is a choice, or that this group will cling to the benefits of low debt if they come to feel more economically secure.