Total household debt in the United States decreased by $13 billion in the second quarter of 2026, marking a 0.1% decline to $18.8 trillion, according to the Federal Reserve Bank of New York's Quarterly Report on Household Debt and Credit released today. The modest drop reflects diverging trends across different types of consumer borrowing, with mortgage balances falling while credit card and auto loan debt continued to climb.
Mortgage balances dropped by $74 billion during the quarter and reached $13.1 trillion at the end of June, the report shows. Home equity lines of credit moved in the opposite direction, rising by $13 billion to $459 billion—a figure that sits $142 billion above the low point recorded in the first quarter of 2022. Credit card balances climbed by $21 billion to $1.26 trillion, while auto loan balances grew by $28 billion to $1.71 trillion. Student loan balances declined by $7 billion, ending the quarter at $1.65 trillion. New mortgage originations held relatively steady at $505 billion, while auto loan originations picked up with $211 billion in new loans appearing this quarter. Credit card limits continued expanding with an $85 billion increase, and HELOC limits rose by $19 billion, continuing a pattern of growth that began in 2022.
"Delinquency rates across most products have held steady over the past two years," said Joelle Scally, Economic Policy Advisor at the New York Fed, in the report. "Still, new delinquencies for auto loans and credit cards remain at elevated levels, a trend we'll continue to monitor." The report finds that aggregate delinquency rates improved slightly in the second quarter, with 4.7% of outstanding debt in some stage of delinquency. Transitions into early delinquency rose slightly for auto loans and mortgages but remained largely steady for credit cards and other debts, while HELOC delinquency transitions improved slightly. The flow into serious delinquency—defined as 90 days or more past due—remained mostly unchanged across most categories, though student loan figures continue to show distortions from the re-reporting of defaulted student debt.
The steady delinquency rates mask underlying stress in specific lending categories, particularly for auto loans and credit cards, where new delinquencies remain elevated despite overall stability. The report's data reveals that the annualized share of credit card balances transitioning into serious delinquency rose only marginally from 6.93% in the second quarter of 2025 to 6.97% in the second quarter of 2026, while auto loan serious delinquency flows increased from 2.93% to 3.00% over the same period. The continued expansion of credit card and HELOC limits suggests lenders remain willing to extend credit despite these persistent delinquency concerns, reflecting confidence in borrower capacity even as some segments show strain.
The New York Fed's monitoring focus on auto loan and credit card delinquencies signals that these areas warrant attention even as the broader household debt picture shows modest improvement. Year-over-year, total household debt increased by $383 billion despite the quarterly decline, with mortgages up $182 billion annually and credit cards rising $54 billion over the 12-month period. The combination of falling mortgage balances in the quarter alongside rising HELOC usage suggests homeowners may be tapping equity rather than taking on new mortgage debt, a shift that bears watching as credit conditions evolve.