U.S. household debt hit a fresh record of $18.585 trillion in the third quarter of 2025, covering July through September, up sharply from $17.7 trillion in early 2024. This marks a continuation of the steady rise seen from $17.06 trillion in mid-2023, with the latest quarterly jump of about $197 billion pushing totals even higher. Mortgages remain the biggest piece at $13.072 trillion, making up 70% of the total, while auto loans sit at $1.655 trillion, credit card balances reached a record $1.233 trillion, and student loans clocked in at $1.653 trillion.
Think about what this means for everyday finances. Mortgages drive most of the growth because home values stay high and borrowing remains active despite rates, with balances up significantly year over year. Credit card debt stands out too, climbing $24 billion in Q3 to that all-time high, up nearly 6% from last year, as people lean on plastic for daily needs amid lingering inflation pressures. Auto loans held steady at $1.66 trillion, showing buyers still commit to big purchases, and student loans ticked up with more delinquencies appearing after pandemic reporting pauses ended.
Analysts point to a few key forces behind the increase. Researchers at the New York Fed note that overall household balance sheets look solid for now, though younger borrowers show early signs of strain, with delinquency rates at 4.4% across debts. Bank of America economists observe that debt payments take just 11.2% of disposable income in recent quarters, below past peaks, leaving room for more borrowing if jobs hold steady. Yet KPMG Senior Economist Matthew Nestler warns of risks, as delinquencies hit multi-year highs and student loan issues could crimp spending, especially with unemployment possibly rising.
Delinquencies add another layer to watch. Credit cards and autos stayed mostly stable in serious delinquencies, but student loans jumped with nearly 10% now 90 days late, reflecting catch-up from unreported misses during COVID relief. Mortgages saw slight upticks too, with early delinquencies edging higher in some regions. Average household debt hovered around $105,056 based on prior year data, but the nominal climb signals families stretching further even as income shares remain manageable.
Numbers like these matter because they shape consumer behavior and the broader economy. High mortgage loads tie up wealth in homes, limiting flexibility, while record credit card use hints at reliance on short-term fixes. Experts from the Fed and banks agree the trend reflects steady demand over distress, but pockets of vulnerability in credit cards and student debt could slow spending if rates stay elevated or jobs soften. As totals push past $18.5 trillion, households navigate a landscape where borrowing fuels life but edges closer to limits.
