DSNews delivers stories, ideas, links, companies, people, events, and videos impacting the mortgage default servicing industry.
Issue link: http://digital.dsnews.com/i/1539371
MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 60 September 2025 J O U R N A L Default Servicing HOUSEHOLD DEBT NEARS $18.4T: ARE U.S. CONSUMERS OVEREXTENDED? T he Center for Microeconomic Data at the Federal Reserve Bank of New York released its Quarterly Report on Household Debt and Credit. According to the research, household debt rose by $185 billion (1%) to $18.39 trillion in Q2 2025. Data from the New York Fed's nationally representative Consumer Credit Panel served as the basis for the report. . Alongside the data mentioned, the New York Fed published a blog article from Liberty Street Economics that examined borrower patterns in the mortgage market by area, credit score, delinquency rates, and balances. "This quarter's flow of household debt into serious delinquency was mixed across debt types, with credit card and auto loans holding steady, student loans continuing to rise, and mortgages edging up slightly," said Joelle Scally, Economic Policy Advisor at the New York Fed. "De- spite the recent uptick in mortgage delin- quency, overall mortgage performance remains strong by historical standards." Key Findings — National • Outstanding student loan debt stood at $1.64 trillion in Q2 2025. • Missed federal student loan pay- ments that were not previously re- ported to credit bureaus between Q2 2020 and Q4 2024 are now appear- ing in credit reports. Consequently, student loan delinquency rates continued to rise. • In Q2 2025, 10.2% of aggregate student debt was reported 90+ days delinquent. At the end of June 2025, mortgage balances stood at $12.94 trillion, having increased by $131 billion in the second quarter. Credit card balances were $1.21 trillion, up $27 billion from the prior quarter. Additionally, auto loan balances rose by $13 billion, reaching $1.66 trillion. HELOC balances increased for the twelfth straight quarter, rising $9 billion to $411 billion. At $1.64 trillion, student loan balances increased by $7 billion. Non-housing balances increased by $45 billion overall, which was a 0.9% rise over the first quarter of 2025. In Q2 2025, there were $458 billion in newly created mortgages, indicating a modest rise in the pace of mortgage originations. Compared to the $166 bil- lion recorded in Q1 2025, there were $188 billion more new vehicle loans and leases that showed up on credit reports in Q2. The total amount of credit card account limits increased by $78 billion, or 1.5%, over the previous quarter. In Q2, 4.4% of outstanding debt was in some stage of delinquency, indicat- ing that aggregate delinquency rates remained high. With the exception of student loans, the transition into early de- Household Debt and Credit Developments as of Q2 2025 Category Quarterly Change* (Billions $) Annual Change** (Billions $) Total As of Q2 2025 (Trillions $) Mortgage Debt (+) $131 (+) $416 $12.94 Home Equity Line of Credit (HELOC) (+) $9 (+) $31 $0.411 Student Debt (+) $7 (+) $53 $1.638 Auto Debt (+) $13 (+) $29 $1.655 Credit Card Debt (+) $27 (+) $67 $1.209 Other (-) $2 (-) $4 $0.540 Total Debt (+) $185 (+) $592 $18.388 Note: *Change from Q1 2025 to Q2 2025 ** Change from Q2 2024 to Q2 2025 Flow into Serious Delinquency (90 days or more delinquent): Metrics Q2 2024 Q2 2025 Mortgage Debt 0.95% 1.29% Home Equity Line of Credit 0.51% 1.15% Student Loan Debt 0.80% 12.88% Auto Loan Debt 2.88% 2.93% Credit Card Debt 7.18% 6.93% Other 5.42% 5.42% ALL 1.59% 2.91%