Household balance sheets generally stable

August 11, 2026

Nominal household debt edged lower 0.1% to a total of $18.77 trillion in the second quarter, according to the Household Debt and Credit report from the Federal Reserve Bank of New York. Younger borrowers (18-49 years) took on more debt while older borrowers (50+) reduced their debt load.

Delinquencies of any duration were flat at 4.74% of outstanding debt, compared to 4.75% in the first quarter. That is a hair below the recent high of 4.8% in the fourth quarter of last year and equal to the share in late 2019. The share has steadily grown post-pandemic but started to flatline late last year.

Seriously delinquent (90 days or more) student loans moved higher to 10.6%. That is up from only 0.5% in late 2024 before the pandemic-era moratorium on student loan repayment ended.

One sign of optimism: transitions into serious delinquency fell to 7.4% from 16.2% at the end of 2025. Transitions have fallen sharply across all age groups. Even outstanding student loan debt edged lower for the second quarter in a row. 

Student loan borrowers will likely remain stressed in the second half of the year. By late September, more than seven million borrowers will need to exit the expired repayment plan and enroll in one of the new options. These could come with higher payments. Gen X borrowers are hit especially hard. They fall into the “sandwich” years, with care responsibilities for both children and the elderly, which can be costly. 

Credit card debt grew 1.7% in the second quarter after falling 2.7% in the first quarter. New, 30-day delinquencies were essentially unchanged (rising to 8.7% from 8.6%) while serious delinquencies edged lower to 12.9% from 13.1%. Transitions into serious delinquencies also fell, albeit only slightly to 7% from 7.1%.

The slowdown in serious delinquencies reflects better credit standards following the lending frenzy when rates were still extremely low. Most major banks have said they are seeing an improvement in credit quality in recent months, despite the strain associated with higher prices at the gas pump.

The New York Fed argues that rising credit card delinquency rates mostly reflect older charged-off debts remaining on credit reports. Measures of new delinquencies have been largely stable since 2024. That suggests credit stress is elevated but has not worsened. The 23 million consumers with charged-off debts, however, may still face financial challenges because those debts remain on their credit reports and often remain legally owed.

Disposable personal income adjusted for inflation ticked up in May and June after declining since January. It is nearly flat compared to a year ago. The personal savings rate stands at a multi-year low. Yet consumption remains strong, buoyed by a stable labor market, low unemployment, a dramatic increase in wealth from both equities and housing and more credit.

Auto loans ticked up 1.7% after gaining 1.1% in the first quarter. New, 30-day delinquencies rose to 7.9% from 7.7%; serious delinquencies edged lower to 5.5% from 5.6%. Transitions into serious delinquencies were flat at 3%. 

The Senior Loan Officer Opinion Survey (SLOOS) by the Federal Reserve found that banks tightened credit card loan standards while standards were unchanged for auto loans and HELOCS. Demand grew for HELOCS, while it weakened for autos.

Mortgage balances edged lower by 0.6% in the second quarter. Most of the decline reflects a temporary reporting issue; without it, mortgage debt would have been roughly flat.

Seriously delinquent mortgage loans fell (1% from 1.1%) while transitions into serious delinquency were flat at 1.5% compared to last quarter. Mortgage rates ticked up over the quarter as the 10-Year Treasury yield rose amid energy price concerns and changing expectations for interest rates.

Home equity lines of credit (HELOC) balances increased by $13 billion. That marks the 17th straight quarter of gains. New foreclosures were flat while new bankruptcies edged higher. Both are below pre-pandemic averages.