U.S. Household Debt Drops for First Time Since 2020
U.S. aggregate household debt fell by $13 billion in the second quarter of 2026, though non-housing debt and subprime auto loans reached record levels.
Aggregate household debt in the United States declined by $13 billion, or 0.1%, during the second quarter of 2026. This represents the first quarterly decrease since the second quarter of 2020, bringing total balances to $18.8 trillion.
The Federal Reserve Bank of New York attributed the overall decline to a $74 billion drop in mortgage debt, though it noted this was primarily due to a temporary reporting gap caused by a transfer of servicing. In contrast, non-housing debt increased by $48 billion, driven by higher credit card and auto loan balances.
Auto loan originations for subprime applicants with FICO scores below 660 reached record highs, with borrowers aged 30 to 50 fueling the growth. While some delinquency rates have decreased, the number of loans delinquent for 90 days or more remains near record highs for student loans, auto loans, and credit cards.
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