Household debt is increasing but delinquencies are moderating, according to the Federal Reserve Bank of New York’s Center for Microeconomic Data Quarterly Report on Household Debt and Credit.
Household debt increased by $197 billion (1%) in the third quarter of the year, rising to $18.59 trillion.
“Household debt balances are growing at a moderate pace, with delinquency rates stabilizing,” said Donghoon Lee, New York Fed Economic Research Adviser.. “The relatively low mortgage delinquency rates reflect the housing market’s resilience, driven by ample home equity and tight underwriting standards.”
Aggregate delinquency rates remained elevated in the quarter, with 4.5% of outstanding debt in some stage of delinquency. Transitions into early delinquency were mixed with credit card debt and student loans increasing, while all other debt types saw decreases. Transitions into serious delinquency mostly increased across debt types, although mortgages saw a slight decrease.
Mortgage balances grew by $137 billion in the third quarter and totaled $13.07 trillion at the end of September 2025. Credit card balances rose by $24 billion from the previous quarter and stood at $1.23 trillion. Auto loan balances held steady at $1.66 trillion. Home equity line of credit balances rose by $11 billion to $422 billion. Student loan balances rose by $15 billion and stood at $1.65 trillion. In total, non-housing balances rose by $49 billion, a 1% increase from the previous quarter.
The pace of mortgage originations increased with $512 billion new loans in the quarter. There was $184 billion in new auto loans and leases appearing on credit reports during the third quarter, a small dip from the $188 billion in the previous quarter. Aggregate limits on credit card accounts continued to rise by $94 billion, representing a 1.8% increase from the previous quarter. HELOC limits rose by $8 billion, continuing the growth in HELOC limits that began in 2022.
“The data t reinforces a key theme we’re watching closely,” said Jane Mason, CEO of Clarifire. “Rising consumer debt and shifting credit profiles are creating new operational stress for mortgage servicers, and it will require frontline technology and operational creativity to manage that risk. Historic workout playbooks for servicers will not always suffice. Smart scenario-modeling and borrower predictive analysis with segmentation, coupled with technological flexibility and visibility, are increasingly separating high-performing servicers from the rest. To compete in this evolving credit-environment, the ability to track non-mortgage debt—such as student loans, HELOCs, and other consumer lines—and automate timely loss mitigation workflows is mission-critical.”
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