U.S. household debt has hit a new record, surpassing $18 trillion in early 2025. This milestone reflects a complex mix of economic factors and changing borrowing patterns that are shaping the financial lives of millions of Americans.
At the heart of this surge is student loan debt, which has seen a sharp increase after federal payment pauses ended. Student loan balances jumped by $16 billion in just one quarter, reaching about $1.63 trillion overall. The end of the pandemic-era payment freeze led to a wave of delinquencies, with nearly six million borrowers now 90 days or more behind on payments—a dramatic rise from previous years when delinquency rates were under 1%. This shift has had serious consequences: many borrowers have experienced significant drops in their credit scores, making it harder to access affordable loans for homes, cars, or other needs.
Mortgage debt remains the largest piece of the household debt pie—accounting for roughly 70%—with Americans owing around $12.8 trillion on nearly 86 million mortgages nationwide. The average mortgage balance per borrower stands at about $149,000. Despite rising interest rates hovering around 6-7%, homebuyers continue to take on new mortgage debt; over $430 billion was originated in just the first quarter of this year alone.
Auto loans also contribute significantly to non-mortgage debts and have been relatively stable compared to student loans and mortgages. Credit card balances saw modest declines recently but still play an important role in overall consumer credit trends.
On average, each American with credit carries about $62,500 in total debt as of early 2025 when adjusted for inflation—a figure that highlights how deeply indebted many households are across various categories.
This record-high household debt level paints a picture not only of increased borrowing but also growing financial strain for many families navigating rising costs and shifting economic conditions. The interplay between different types of debts—from mortgages anchoring long-term obligations to student loans impacting younger generations—illustrates how diverse factors combine to shape America’s current credit landscape.
Understanding these dynamics is crucial because they affect everything from individual financial health and spending power to broader economic stability going forward. As policymakers and consumers alike grapple with these challenges, keeping an eye on how household debt evolves will remain essential throughout this year and beyond.