US Household Debt Hits Record $19.1 Trillion

The Federal Reserve Bank of New York reported that total U.S. household debt reached a record $19.1 trillion in the third quarter, driven by a $334 billion increase. This growth included a $257 billion rise in mortgage borrowing, bringing mortgage balances to $13.4 trillion, and a $22 billion increase in credit card balances, which hit a record $1.29 trillion.

Troubled borrowing rose to 5% in the third quarter, up 0.3 percentage points from the previous quarter. While the bank stated overall credit quality remains strong and consistent with pre-pandemic levels, a significant divide has emerged. Lower-income borrowers and renters face increasing distress with auto loans and credit cards, often due to eased lending standards during the pandemic. Student loans more than 90 days past due also rose to 10.9%.

Affluent households have utilized home equity lines of credit at the highest rate since 2005, increasing those balances by $23 billion. However, financial pressure is extending across income brackets; Bank of America researchers noted that one in four higher-income mortgage holders now spend over half their income on housing. TransUnion reported the average consumer credit card balance has reached $6,678, while average new offer interest rates hover around 24%.