Federal Reserve Report Shows Mixed U.S. Household Debt Health

The Federal Reserve System released a report on household debt and credit indicating that American households are generally in solid financial shape, though significant disparities exist across different debt sectors. Total U.S. household debt stands at $19 trillion, with mortgage debt accounting for approximately 70 percent of that total. Many homeowners continue to provide economic strength to the system by benefiting from low fixed-rate mortgages.

Other sectors of consumer credit show increasing stress. Auto loan balances rose by $28 billion in the second quarter to reach $1.7 trillion, a trend accompanied by a slight increase in delinquencies. While the acceleration of student loan debt cooled during the second quarter, the sector remains volatile. The Student Debt Crisis Center reports that one in five borrowers is now in default.

This instability follows the July 1 termination of the Saving on a Valuable Education (SAVE) program. The program was ended through a tax bill signed by Donald Trump and supported by White House lawsuits. Further complicating the financial landscape, data shows that real average hourly earnings decreased from July 2025 to July 2026 when adjusted for inflation.