Fed: Household Debt Nears $18 Trillion as Delinquencies Pressure Consumers

New government data shows American consumer debt continuing to grow.

The Federal Reserve Bank of New York’s Center for Microeconomic Data released its Quarterly Report on Household Debt and Credit Wednesday (Nov. 13), showing a slight uptick in total household debt during the third quarter, up 0.8% ($147 billion) to $17.94 trillion.

“Although household balances continue to rise in nominal terms, growth in income has outpaced debt,” Donghoon Lee, economic research advisor at the New York Fed, said in a news release. “Still, elevated delinquency rates reveal stress for many households, even amid some moderation in delinquency trends this quarter.”

According to the report, mortgage balances climbed by $75 billion from the prior quarter, hitting $12.59 trillion at the end of September.

Home equity line of credit (HELOC) balances rose by $7 billion, marking the tenth consecutive quarterly increase since the first quarter of 2022, reaching $387 billion. Credit card balances rose by $24 billion to $1.17 trillion, while auto loan balances ticked up by $18 billion, coming to $1.64 trillion.

Balances such as retail cards and other consumer loans, were effectively flat, climbing $2 billion, while student loan balances grew by $21 billion, reaching $1.61 trillion.

The pace of mortgage originations increased slightly from the pace observed in the previous four quarters, with $448 billion in newly originated mortgages in Q3.

“Aggregate delinquency rates edged up from the previous quarter, with 3.5% of outstanding debt in some stage of delinquency,” the report noted.

And around 126,000 consumers had a bankruptcy notation added to their credit reports during the quarter, down slightly from Q2.

The report came the same day that the Bureau of Labor Statistics released its latest Consumer Price Index. As PYMNTS wrote, only time will tell if the slight uptick in inflation included in the report “is a blip or something more.”

The data shows prices rising 0.2%, in line with estimates measured month to month, and were up 2.6% compared to last year. This could indicate that the Federal Reserve is on track to implement another cut to interest rates.

And though inflation may be progressing at a pace that’s moderated from previously torrid levels, there’s scant relief to be felt in the aisles, as consumers spend more to eat and to have four walls around them.

“Indeed, the divergence between what the data tell us and what households feel in their collective wallets is stark,” that report said. “PYMNTS’ Karen Webster noted last October that consumers have all but shrugged at the monthly reports.”