Is America’s rising household debt a red flag or just a new normal? The latest data from the Federal Reserve Bank of New York shows U.S. household debt rose by $185 billion in Q2, reaching a record $18.39 trillion. That’s a 1% increase from last quarter, propelled by fresh auto and mortgage loans. Mortgage balances alone jumped $131 billion, while non-housing debt—think auto loans, credit cards, student loans—grew $45 billion as Americans continued borrowing across the board.
But here’s the pinch: Serious delinquency rates for student loans have surged to 12.9%, the highest in 21 years, and overall, 3% of all household debt is now at least 90 days overdue. This uptick in missed payments—a direct consequence of high rates and waning job growth—suggests more Americans are feeling the stress. With consumer spending already slipping and all major loan categories (except "other") showing increases, the debt for 40–49-year-olds now tallies at $4.81 trillion, starkly higher than the $1.1 trillion owed by those 18–29.
- Housing debt: up 1.1%, led by mortgages and HELOCs
- Non-housing debt: up 0.9%, driven by autos, credit cards, student loans
- Delinquency risk: mounting for both student and FHA-insured mortgages
Fed officials are watching closely, but argue the consumer remains "in good shape"—at least for now. Are households nearing their financial limits?
