US household debt falls $13B in Q2 2026, first decline since 2020

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. Home equity lines of credit continued their remarkable streak, rising $13 billion to $459 billion. That marks the 17th consecutive quarterly increase for HELOCs, a run stretching back more than four years. The mortgage puzzle The $74 billion mortgage decline is the single biggest driver of the overall drop, but it comes with an asterisk. Analysts have po...