U.S. household debt surged to an unprecedented $18.8 trillion in the first quarter, according to the Federal Reserve Bank of New York. This new high primarily reflected increased mortgage and auto loan balances, highlighting continuing financial strain among American consumers amid a rising cost of living.
Mortgage debt reached $13.2 trillion, while auto loans climbed to $1.69 trillion. Although credit card debt decreased slightly by $25 billion during the quarter to $1.25 trillion, it remains elevated, up by $70 billion compared to the previous year. In contrast, student loan debt saw a modest decline to $1.66 trillion, yet more than 10% of student loan balances are now overdue, nearing levels seen before the pandemic.
Researchers at the New York Fed described the overall credit situation as stable but flagged vulnerabilities among younger borrowers and low-income households who face growing repayment difficulties. These trends emerge as inflation increased for a second straight month, reaching 3.8% year-over-year in April — the highest annual rise in prices in three years, according to the U.S. Bureau of Labor Statistics.