Grocery shoppers. Photo credit: Getty
Americans’ record mountain of debt got even bigger in the third quarter.
Over the last three months, U.S. households racked up more debt and continued to miss payments. Total consumer debt climbed $147 billion (0.8 percent) in the quarter to hit an all-time high of $17.94 trillion, Wednesday data from the New York Fed showed.
Every type of loan product saw balances increase in the quarter including:
- Mortgages: +$75 billion
- Credit cards: +$24 billion
- Auto loans: +$18 billion
Meanwhile, the share of loans in delinquency rose from 3.2 percent to 3.5 percent over the last quarter.
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While that remains below pre-pandemic levels of roughly 4.6 percent, new delinquencies are still piling up faster than households are paying off new loans.
Two key metrics that moved in a more promising direction was the number of new bankruptcies and foreclosures, which both ticked lower over the last three months. In the quarter prior, both measures had hit their highest levels since the start of the pandemic in 2020.
In any case, researchers pointed out that even though the total amount of debt has climbed since the pandemic, Americans’ disposable income has also increased to $21.80 trillion. That brings the ratio of total debt balance to income to 82 percent — just below the pre-pandemic level of 86 percent.
“Relative to income, balances are actually lower than they were before the pandemic,” New York Fed researchers said.
“The recent downward movement in the ratio of debt to income has been followed by an apparent moderating of delinquency rates for auto loans and credit cards during the third quarter,” the researchers added. “If that trend continues, it would suggest that rising debt burdens remain manageable.”