Americans’ household debt rose in the third quarter of 2026 by 1.8% to $19.1 trillion. The increase in debt comes as interest rates are rising. Mortgage rates have once again topped 7%.
Despite higher rates and increased debt, transitions into delinquency have only crept up slightly higher, reports the Federal Reserve Bank of New York in its quarterly Household Debt and Credit Report, released November 10. The bank’s researchers explained:
“Household debt levels rose moderately, led by increases in mortgage and home equity line of credit originations” said Donghoon Lee, Economic Research Advisor at the New York Fed. “Although delinquency transition rates for housing debts have crept up, the overall credit quality of these loans remains strong.”
Mortgage balances rose by $257 billion in the third quarter and totaled $13.4 trillion at the end of September. Home equity lines of credit (HELOC) balances rose by $23 billion totaling $481 billion, the largest increase in HELOC balances observed since 2005. Credit card balances rose by $22 billion and stood at $1.29 trillion, and auto loan balances increased by $21 billion to $1.73 trillion. Student loan balances edged up by $5 billion and stood at $1.66 trillion.
The pace of mortgage originations grew notably with $595 billion newly originated in Q3 2026. Auto loan originations remained at a high rate; there were $208 billion in new auto loans appearing on credit reports during the third quarter. Aggregate limits on credit cards continued to rise, with a $115 billion uptick in the third quarter. HELOC limits rose by $31 billion, continuing an expansion in HELOCs that began in 2022.
Aggregate delinquency rates worsened in Q3 2026, with 5.0% of outstanding debt in some stage of delinquency, up 0.3 percentage points from the previous quarter. Transition into early delinquency continued to tick up for auto loans and mortgages but improved slightly for credit cards. Transition rates into serious delinquency slightly improved for credit cards and student loans, while those for auto loans and HELOCs remained flat. For mortgages, the transition rate into serious delinquency worsened but remains low by historical standards.
Action Line: Debt is growing at the government, corporate, and household levels in America. Use debt carefully, and understand your interest rates and fees. Click here to subscribe to my free monthly Survive & Thrive letter.
