Household debt is reverting to pre-pandemic levels

May 15, 2025

Household debt rose 0.9% quarter over quarter to a total of $18.2 trillion during the first quarter of this year, according to the Federal Reserve Bank of New York’s Household Debt and Credit report. Consumers aged 18-39 reduced their debt in the first quarter; those aged 40 or over took on more debt.

Delinquencies of any duration jumped to 4.4% from 3.6% in the fourth quarter of last year. That is the highest since the beginning of 2020. It marks a milestone with the pandemic-era drop in delinquencies finished. Seriously delinquent loans surged to 0.5% from 0.2%, the highest since the third quarter of 2011.

New, seriously delinquent (90 days or more) student loans surged to 7.7% in the first quarter from 0.5%. That is the highest since the 10.8% rate in the first quarter of 2020, before pandemic-era relief for student borrowers. Missed student loan payments were not reported to credit bureaus from the second quarter of 2020 to the end of 2024.

An accompanying blog post by the Federal Reserve Bank of New York analyzed student loan borrower delinquency rates. It found that the share of seriously delinquent borrowers (90 or more days past due) was 13.7%, slightly below the 14.4% in early 2020. However, 23.7% of borrowers were seriously delinquent; that is above the rate in early 2020.

Of the newly delinquent student borrowers, 2.4 million previously had a credit score of above 620. Those individuals will now have a harder time accessing different types of credit. That could act as a headwind for consumption moving forward.

Mortgage balances rose $199 billion, or 1.6%. That is the largest monthly increase since the housing boom at the end of 2022. New mortgage delinquencies ticked up to 3.7% from 3.6%, the highest rate since late 2015.

Seriously delinquent mortgage loans rose to 0.9% from 0.7%, the highest since early 2020; we're seeing a pattern here. Transitions into serious delinquency rose for all age groups except for those 40-49 years old.

Credit card debt dropped by $29 billion in the first quarter of this year. That translates to -2.4%, the largest quarterly drop since early 2021. Part of that reflects the seasonal effect of borrowers paying down debt after the holiday season.

New, 30-day delinquencies on credit cards fell to 8.8% from 9%; new, 90-day delinquencies ticked down to 7% from 7.2%. Overall serious delinquencies jumped to 12.3% from 11.4%. That is the most since early 2011.

Consumers took on less auto debt in the first quarter. It dropped by $13 billion, or -0.8%. That is the first quarterly decline since mid-2020. Auto debt declined despite the surge in auto sales in March when consumers sought to buy ahead of tariffs. Wealthier consumers, using cash, accounted for many of those purchases.

New delinquencies on auto loans of 30 and 90 days both ticked down in the first quarter. The new, 90-day delinquency rate of 2.9%, a touch below the 3% last quarter, is still the second-highest rate since early 2010. Borrowers remain stressed, especially those aged 30-49.

Home equity lines of credit (HELOC) balances grew by $6 billion. That marks the twelfth straight quarter of gains. HELOCs are still below pre-pandemic levels; they allow homeowners to access record levels of home equity.

New foreclosures edged up while new bankruptcies ticked down in the first quarter. Both remain well below pre-pandemic averages.