For the first time in six years, Americans collectively owe less money than they did the quarter before. Total US household debt dropped by $13 billion in the second quarter of 2026, slipping 0.1% to $18.8 trillion, according to the Federal Reserve Bank of New York’s latest Quarterly Report on Household Debt and Credit.
The last time the national debt load shrank was during the pandemic-era upheaval of 2020.
Where the money went (and didn’t)
The decline was overwhelmingly a housing story. Mortgage balances fell by $74 billion to $13.1 trillion. Student loan balances also contracted, falling $7 billion to $1.65 trillion.
But those declines were partially offset by Americans borrowing more for just about everything else. Credit card balances rose $21 billion to $1.26 trillion. Auto loan balances climbed $28 billion to $1.71 trillion.
