U.S. Auto Loan Balances Rise to $1.71 Trillion as Consumer Debt Pressures Persist

Americans added to auto loan and credit-card balances in the second quarter even as total household debt edged lower, according to new data from the Federal Reserve Bank of New York. Auto loan balances rose by $28 billion to $1.713 trillion, while credit-card balances increased by $21 billion to $1.263 trillion.

The more useful signal for borrowers is underneath the headline total. Non-housing debt increased by $48 billion, or 0.9%, from the first quarter. Total household debt slipped by just $13 billion to $18.771 trillion, and the New York Fed said most of the reported decline in mortgage balances reflected a temporary servicer-transfer gap in credit reporting. Without that gap, mortgage balances would have been roughly flat rather than materially lower.

Auto borrowing keeps expanding

The New York Fed’s second-quarter household debt release, based on its nationally representative Consumer Credit Panel drawn from Equifax credit reports, showed auto debt up 1.7% from the first quarter and $58 billion higher than a year earlier. The increase took outstanding auto balances to $1.713 trillion at the end of June.

New auto loan originations also picked up. The report recorded $211 billion in new auto loans appearing on credit reports during the quarter, while the median credit score among newly originated auto loans fell by seven points from the first quarter. Because the New York Fed changed the credit-score measure used in the report beginning in 2026, comparisons with older vintages require care, but the quarter-to-quarter decline still points to a modest deterioration in the credit profile of new borrowers within the current methodology.

Payment performance did not show a broad break, but the stress indicators remain worth watching. The flow into early delinquency rose slightly for auto loans in the second quarter. The annualized flow into serious delinquency, defined as 90 days or more past due, was 3.00% for auto loans, compared with 2.93% in the second quarter of 2025. The New York Fed said new delinquencies for auto loans and credit cards remain elevated even though delinquency rates across most products have been broadly steady over the past two years.

That combination matters for the consumer-credit picture. Auto borrowing is still expanding in dollar terms and new lending remains active, but the data do not show a sudden deterioration in repayment behavior. Instead, they point to continued borrowing alongside persistent pockets of stress.

Credit-card balances rise, but new delinquencies are steadier

Credit-card balances climbed to $1.263 trillion in the second quarter, up $21 billion from the first quarter and $54 billion from a year earlier. The increase partly reversed the $25 billion decline recorded in the first quarter, when card balances fell to $1.252 trillion.

The flow into serious credit-card delinquency was 6.97% in the second quarter, little changed from 6.93% a year earlier. Early delinquency transitions were also described by the New York Fed as largely steady. Those figures are important because a separate measure of seriously delinquent credit-card balances has looked much worse on the surface.

In an accompanying Liberty Street Economics analysis, New York Fed researchers said the share of credit-card balances that were 90 or more days delinquent had risen from 7.6% in the third quarter of 2022 to 12.8% in the first quarter of 2026. The researchers found that the increase in that stock measure was being driven in part by older charged-off debts remaining on credit reports for longer periods, rather than by a fresh acceleration in the rate at which current accounts were becoming newly delinquent.

That distinction tempers, but does not erase, the consumer-stress signal. Credit-card balances are still higher than a year ago, and the rate at which balances move into serious delinquency remains elevated. At the same time, the New York Fed’s flow measures suggest the deterioration has stabilized rather than continued to worsen quarter after quarter.

Across all household debt, 4.7% of outstanding balances were in some stage of delinquency at the end of June, down 0.1 percentage point from the previous quarter. Transitions into serious delinquency were mostly unchanged across debt categories.

The drop in total household debt masks a reporting distortion

Total household debt fell by $13 billion in the second quarter, a 0.1% decline, to $18.771 trillion. That headline change was small, and the underlying composition makes it even less useful as a measure of whether U.S. households were broadly paying down debt.

Mortgage balances declined by $74 billion to $13.117 trillion, but the New York Fed said the decline was mostly caused by a servicer-transfer gap in mortgage reporting. Student loan balances fell by $7 billion to $1.651 trillion. Those declines offset increases in auto loans, credit cards, home equity lines of credit and other consumer debt.

HELOC balances rose by $13 billion to $459 billion, marking the 17th consecutive quarterly increase, while the category that includes retail cards and consumer-finance loans increased by $6 billion to $568 billion. On a year-over-year basis, total household debt was still $383 billion higher than in the second quarter of 2025.

The second-quarter figures therefore show a split picture rather than broad deleveraging. Mortgage reporting pulled the aggregate total slightly lower, but households continued to add debt in several non-housing categories. Auto loans were the largest contributor to that increase among the consumer-credit categories highlighted in the report, and credit-card balances also moved higher.

For borrowers, the key credit-quality signal is that delinquency flows remain elevated without showing a fresh surge. The second-quarter data pair rising auto and credit-card balances with relatively steady serious-delinquency transitions, leaving the direction of consumer borrowing clearer than the direction of consumer stress.