US consumer debt hits record $18.79 trillion as non-mortgage delinquencies surge
Despite rising strain in revolving credit and education loans, major financial institutions report robust discretionary spending, suggesting the broader economy has not yet reached a tipping point.
Total US consumer debt has climbed to approximately $18.79 trillion as of May 2026, driven largely by mortgage balances that have reached a record $13 trillion. While the housing sector remains the primary driver of aggregate debt levels, the Federal Reserve Bank of New York’s latest data reveals a diverging trend between secured and unsecured borrowing. Mortgage delinquencies remain historically low at 1.09%, even though that figure has more than doubled since the second quarter of 2023. This stability is underpinned by substantial household wealth, with Americans holding approximately $34 trillion in accumulated home equity, a figure nearly four times the level recorded in 2009.
In contrast, non-mortgage debt categories are exhibiting significant stress. Since the second quarter of 2023, credit card balances have risen by 21 per cent, while home equity line of credit (HELOC) balances have increased by 31 per cent. These rapid expansions in revolving credit have coincided with a sharp deterioration in repayment rates. Credit card delinquency rates, defined as balances 90 or more days past due, have reached 13.1 per cent, marking the highest level since early 2011. Similarly, student loan delinquencies have climbed to a six-year high, with rates remaining in double digits.
Despite the alarming metrics in unsecured credit, broader economic indicators suggest that household debt-to-income ratios remain manageable. This resilience is attributed to a tight labour market, low unemployment, and rising wages, which have preserved consumer purchasing power. Major financial institutions, including American Express and JPMorgan Chase, have reported that consumer spending remains robust, particularly within discretionary sectors such as travel, dining, and luxury goods.
Executive commentary from recent earnings calls reinforces the view that consumers are not yet cutting back on non-essentials to offset higher costs. American Express CEO Stephen Squeri highlighted an 18 per cent growth in retail luxury spend and record global travel bookings, noting that cardholders appear unaffected by elevated fuel prices. JPMorgan Chase CFO Jeremy Barnum described consumer finances as fundamentally healthy, stating that there is currently insufficient evidence of households reducing discretionary spending to compensate for energy costs.
The divergence between rising delinquencies in specific credit categories and strong overall spending points to a K-shaped economic dynamic. Homeowners, who benefit from low mortgage rates and high equity, continue to drive economic activity, while renters and those reliant on high-interest revolving credit face increasing pressure. While foreclosures have recently hit a six-year high, the increase remains off a historically low base. For now, the combination of strong employment and accessible credit suggests the broader economy has not reached a breaking point, even as individual pockets of financial strain become more visible.
