US household debt drops by USD 13 bn to USD 18.8 tn in Q2 2026: Federal Reserve Bank of New York
New York, August 12
Household debt balances decreased slightly while credit card delinquency transition rates remained steady in the second quarter of 2026, according to the Federal Reserve Bank of New York.
The findings, published in the Federal Reserve Bank of New York's Center for Microeconomic Data Quarterly Report on Household Debt and Credit, revealed total household debt decreased by USD 13 billion, or 0.1 per cent, to stand at USD 18.771 trillion.
Despite the quarterly dip, total debt expanded by USD 383 billion compared to the same period in the previous year. The data, collected from the New York Fed's nationally representative Consumer Credit Panel, showed aggregate delinquency rates improved slightly in the second quarter, with 4.7 per cent of outstanding debt in some stage of delinquency.
"Delinquency rates across most products have held steady over the past two years," said Joelle Scally, Economic Policy Advisor at the New York Fed.
"Still, new delinquencies for auto loans and credit cards remain at elevated levels, a trend we'll continue to monitor," Scally added.
Mortgage balances led the quarterly decline, dropping by USD 74 billion to total USD 13.117 trillion at the end of June, though annual mortgage growth remained positive with a USD 182 billion increase. Mortgage originations held steady with USD 505 billion newly originated during the quarter.
Transition rates into serious delinquency, defined as 90 days or more delinquent, for mortgage debt stood at 1.52 per cent in Q2 2026 compared to 1.29 per cent in Q2 2025.
Home equity lines of credit (HELOC) balances rose by USD 13 billion to USD 459 billion, which registered a USD 48 billion increase year-over-year and stood USD 142 billion above the trough reached in the first quarter of 2022. HELOC limits increased by USD 19 billion. The serious delinquency rate for HELOC remained unchanged at 1.15 per cent.
Credit card balances increased by USD 21 billion during the quarter to reach USD 1.263 trillion, marking a USD 54 billion annual increase. Aggregate credit card limits grew, supported by an USD 85 billion uptick in credit limits earlier in the year.
Credit card serious delinquency transition rates reached 6.97 per cent, compared to 6.93 per cent recorded in Q2 2025.
Auto loan balances grew by USD 28 billion to USD 1.713 trillion, representing a USD 58 billion annual expansion, as auto loan originations picked up to USD 211 billion.
Serious delinquency transitions for auto loans stood at 3.00 per cent, compared to 2.93 per cent a year earlier.
Student debt balances decreased by USD 7 billion to USD 1.651 trillion, though annual figures reflected a USD 13 billion increase.
Transition into serious delinquency for student loans moved to 7.83 per cent from 12.88 per cent in Q2 2025, with student loan delinquencies remaining an exception due to ongoing impacts from the re-reporting of defaulted student debt.
Overall flow into serious delinquency across all debt categories fell to 2.57 per cent from 2.91 per cent recorded a year prior.
— ANI
Reader Comments
Interesting to see HELOC balances rising so much—Americans are basically borrowing against their homes to manage daily expenses. That's exactly the kind of debt trap we should avoid in India's housing market.
USD 18.8 trillion in household debt? That's more than the GDP of most countries combined. And they call this a "decline" of 0.1%. The bigger picture is that Americans are sitting on a mountain of debt that could trigger another financial crisis any day.
Coming from India, I find it fascinating how much data transparency exists in the US financial system. We rarely get such detailed breakdowns from our RBI. That said, those auto loan and credit card delinquency numbers are concerning.
The student loan delinquency rate dropping from 12.88% to 7.83% is a big deal. Though they mention it's due to "re-reporting of defaulted debt"—seems like a technicality rather than actual improvement. Typical financial gymnastics! 😅
As someone tracking global markets from Bengaluru, these numbers tell me the US consumer is stretched thin. The Fed might talk about "holding steady," but 4.7% overall delinquency is basically 1 in 20 Americans struggling with debts. Not the picture of strength we see on Instagram stories. 😂
M < We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.