Interesting. Lower debt numbers track defaults.
It makes sense that people who ditched their bubble house (house and payment)... even if they repurchased a new house (at a lower price) would have less debt and consequently be able to save more (or spend more).
Behavior may not really be changing. Americans may not have changed their overspending ways... this could be a temporary anomaly related to bankruptcy and defaults.
That decline also represents increased house inventory (illiquid assets) and investment losses (plus taxpayer bailout losses).
The other comment in the article:
That said, the way U.S. consumers are shedding their debts isn’t encouraging. Aside from defaults, many are finding relief by refinancing mortgages at extremely low interest rates — the same low interest rates that are making it difficult for an increasing number of older folks to generate enough fixed income for a comfortable retirement. The relief might help debt-ridden consumers get into a position to start spending again sooner than they otherwise would, but the borrower’s gain is the saver’s loss.
So aside from investment losses and tax bailouts for the defaulters... The Treasury and Fed shifted money out of the pockets of investors into the pockets of new home buyers and people refinancing!