U.S. Household Debt Surges to a Record Level, Threatening 140 Million Americans

Nov. 27—The total U.S. household debt surged to a record $18.6 trillion in the third quarter of 2025, the Federal Reserve Bank of New York reported in its Quarterly Report on Household Debt and Credit, which it released on Nov. 5. Compared to the second quarter of this year, household debt is now $197 billion higher. This signals that the level of debt for working households is skyrocketing higher, as the means to pay that debt is less.

Household debt includes home mortgages, credit card debt, auto loans, student loans, and so forth.

A part of the surge of household debt is outstanding home mortgage balances, which jumped to $13.1 trillion during the third quarter. U.S. mortgage debt is now at its highest level ever, higher than the level at the onset of the 2007-09 financial meltdown and economic collapse. The level of mortgage debt has risen because the median price of a U.S. home is an astronomical $415,200, and this necessitates borrowing.

The U.S. government debt, at $38 trillion, is an extremely important development. But there is an attempt by the financial media to focus everyone’s attention on that almost exclusively, which leaves out the critical growth in household, business, and other debt, which together are very large and give an inside reading on the functioning of the real economy.

For example:

• Credit card balances alone jumped $24 billion during the third quarter reaching an all-time high, while the share of balances that are 90 days past due—that is serious delinquency—climbed to 7.1% of all balances, a nearly financial crash level.

• Auto loans tell a similar story. Tricolor Holdings, which dealt in sub-prime auto loans, filed for Chapter 7 bankruptcy on Sept. 10, 2025. Tricolor traded and packaged $945 million in asset-backed securities, whose underlying “instruments” were subprime auto-loans. Subprime loans are loans to car buyers that carry high interest rates, because the people have poor credit ratings. Serious auto delinquency rates are at 3%, the highest since 2010. A spike in resulting defaults has triggered a wave of auto repossessions in 2025. Some 2.2 million vehicles have already been repossessed, per figures from the Recovery Database Network (RDN), and there is a forecast of 3 million U.S. car repossessions by the year’s end, which would be a record.

• Student loan delinquencies have grown at an unprecedented pace. Rates surged to 14.3% in the third quarter from only 0.8% in the fourth quarter of last year (there had been a nearly five-year pause in student loan collections based on the COIV-19 pandemic, but collections resumed on May 5, 2025). The American Enterprise Institute estimates 5.5 million student borrowers are in default on their loans; another 3.7 million are over 270 days delinquent.