According to the Federal Reserve Bank of New York’s latest Quarterly Report on Household Debt and Credit, total household debt rose by $191 billion to reach $18.8 trillion in the fourth quarter of 2025.
At the same time, consumer delinquencies climbed to their highest level in almost a decade, it said.
Aggregate delinquency rates worsened in the fourth quarter of 2025 with 4.8% of outstanding debt now in some stage of delinquency—0.3 percentage points higher than the previous quarter, the New York Fed noted.
According to the report, the housing market continues to drive debt growth, with mortgage balances growing by $98 billion to total $13.17 trillion at the end of December, the New York bank reported.
Home equity lines of credit saw their 15th consecutive quarterly increase, rising by $12 billion to $433 billion, continuing an expansion that began in 2022, the bank noted. Also, roughly 58,000 individuals had new foreclosure notations added to their credit reports, an increase from the previous quarter.
Student Loan Debt
Consumer credit also expanded significantly in the fourth quarter. the New York Fed said. Credit card balances rose by $44 billion during Q4 and now total $1.28 trillion outstanding. That’s up 5.5% since last year. Auto loan balances increased by $12 billion to $1.66 trillion, though new auto loan originations saw a small dip from the previous quarter, according to the report.
The student loan sector faced particular challenges, the bank said. Outstanding student loan debt stood at $1.66 trillion, with delinquency rate remaining elevated at 9.6% of balances of more than 90 days delinquent, “reflecting continued effects from the resumption of payment reporting following the extended pandemic forbearance period.”
About 1 million borrowers who were more than 120 days past due had their loans transferred to the Department of Education’s Default Resolution Group.
New lending activity showed mixed signals, the bank said.
Newly Originated Mortgages Up Slightly
There was $524 billion in newly originated mortgage debt in the fourth quarter, a slight uptick from $512 billion the previous quarter. Credit quality of newly originated mortgages held steady, but auto loans loosened slightly, the report stated, with the median credit score for new mortgages remaining at 775 while auto loan median scores edged down from 724 to 716.
On the positive side, bankruptcy and collection filings showed some improvement, the bank said. Approximately 124,000 consumers had bankruptcy notations added to their credit reports, down from 141,000 the previous quarter.
The percentage of consumers with a third-party collection account on their credit report also declined slightly to 4.6% from 4.9%.
The post Consumer Delinquencies at Highest Level in Nearly a Decade first appeared on The MortgagePoint.
