U.S. auto loan debt hits record high, NY Fed data shows

U.S. auto loan debt climbed to a record high in the second quarter, while other forms of consumer borrowing also increased, the Federal Reserve Bank of New York said on Tuesday.

Total household debt rose to $17.69 trillion in the three months ended June 30, up 0.8% from the prior quarter, according to the New York Fed’s latest Quarterly Report on Household Debt and Credit. Auto loan balances increased to $1.56 trillion, marking the highest level on record.

Credit card balances also rose by $20 billion to $1.24 trillion, while student loan debt edged up to $1.62 trillion. Mortgage debt, the largest component of household borrowing, grew to $12.54 trillion, though the pace of increase slowed compared with previous quarters.

The report highlighted a 1.3% rise in overall household debt, driven by higher borrowing costs and increased demand for credit amid persistent inflation. Delinquency rates remained relatively stable, though auto loan delinquencies ticked up slightly, reflecting tighter lending standards and higher interest rates.

Analysts noted that while total debt levels are elevated, the rise in delinquencies has been modest so far, suggesting borrowers are still managing repayments despite economic headwinds. The New York Fed’s data underscores the growing burden of consumer debt in an environment of elevated interest rates and sticky inflation.

The report comes as the Federal Reserve continues to assess the impact of monetary policy on household finances, with policymakers closely monitoring debt levels and delinquency trends as indicators of economic stress.