Debt Deepens for U.S. Households, Led by Mortgage and Student Loan Stress

Americans ended 2025 with more debt than ever—and more trouble paying it back. New data from the Federal Reserve Bank of New York show household debt climbing to record levels, while delinquency rates have risen to their highest point since 2017.

According to the New York Fed, total U.S. household debt reached $18.77 trillion in the fourth quarter of 2025, up from $18.04 trillion a year earlier. Non-housing debt grew from $5.04 trillion to $5.17 trillion, while housing debt increased from $13 trillion to $13.60 trillion.

Borrowing also gained momentum across major loan categories. The final quarter of 2025 saw $524 billion in newly originated mortgages and $181 billion in new auto loans. Credit card limits rose by $95 billion and Home Equity Line of Credit limits climbed another $25 billion.

But this wave of borrowing came with mounting repayment problems. Total delinquencies reached 4.8% of all outstanding debt in late 2025, according to the New York Fed’s data. “Transitions into early delinquency were mixed with mortgages and student loans increasing, while all other debt types held steady,” the bank noted.

“As household debt levels grow modestly, mortgage delinquencies continue to increase,” Wilbert van der Klaauw, economic research advisor at the New York Fed, added in comments.

He also noted that while overall mortgage delinquency rates remain near historical norms, “the deterioration is concentrated in lower-income areas and in areas with declining home prices.”

Flows into serious delinquency—defined as loans 90 or more days past due—rose sharply year-over-year. Serious mortgage delinquencies climbed from 1.09% in late 2024 to 1.38% by the end of 2025, while HELOC serious delinquencies more than doubled from 0.56% to 1.24%.

Student loans saw the most dramatic shift, jumping from 0.70% to 16.19%, largely due to the resumption of payments following the pandemic-era forbearance period. About a million borrowers, more than 120 days past due, had their loans transferred to the U.S. Department of Education’s Default Resolution Group.

Meanwhile, delinquency rates on credit cards, auto loans and other types of debt edged slightly lower. Even so, serious delinquencies across all categories more than doubled—from 1.70% at the end of 2024 to 3.26% by the close of 2025.

The rise in mortgage distress is particularly uneven. According to the data, delinquency rates are surging fastest in lower-income areas. Borrowers in the lowest-income ZIP codes saw 90-plus-day delinquency rates jump from 0.5% in 2021 to nearly 3% by late 2025, while wealthier households have remained comparatively stable.