The first quarterly decline in US household debt since 2020 stems from a technical adjustment, not consumer deleveraging, the New York Fed said.
US household debt fell by $13 billion in the second quarter of 2026 to $18.77 trillion, marking the first decline in six years. The drop is attributed to a mortgage reporting artifact expected to reverse next quarter, not actual debt repayment by consumers.
Total household debt had surged from $14.15 trillion at the end of 2019 to $18.77 trillion, a $4.63 trillion increase. Auto loans reached a record $1.71 trillion, while 12% of credit card balances are now seriously delinquent, signaling rising financial strain.
The bottom 50% of Americans, holding just 1% of stock market wealth, carry most high-cost debt with leverage ratios exceeding 100%, underscoring persistent inequality in household finances.