US household debt reached an all-time high of $17.943 trillion in the third quarter of 2023, as reported by the Federal Reserve Bank of New York on Wednesday. The total debt increased by $147 billion, or 0.8%, from the second quarter and has risen by $778 billion compared to last year. Donghoon Lee, an economic research adviser at the New York Fed, stated, "Although household balances continue to rise in nominal terms, growth in income has outpaced debt." However, he noted that elevated delinquency rates indicate ongoing stress for many households, despite some signs of moderation in these trends this quarter. Mortgage debt, which constitutes the majority of household liabilities, saw an increase of $75 billion since the last quarter, bringing the total to $12.594 trillion.
Annual growth in mortgage balances totalled $580 billion. The regional Fed highlighted a slight uptick in mortgage originations over the past year. The recent interest rate cut of 25 basis points by the Federal Reserve follows a prior cut of 50 basis points in September, which may have spurred the increase in mortgage borrowing. Credit card debt also experienced significant growth, climbing by $24 billion since the previous quarter and by $87 billion compared to a year ago, reaching $1.166 trillion.
The total limits on credit card accounts increased by $63 billion in the third quarter, representing a 1.3% rise from June. Additionally, student debt rose by $21 billion, and auto debt increased by $18 billion during the quarter. Aggregate delinquency rates for outstanding debt inched up to 3.5%. While credit card delinquency rates showed improvement, early delinquency on auto loans and mortgages saw a slight deterioration, as noted by the New York Fed..