Household debt in the U.S. ticked up slightly in the third quarter of 2024, reaching nearly $18 trillion, according to data out today by the New York Fed. At the same time, personal disposable income has also increased, meaning that when you look at balances relative to income, Americans are doing better with their household debt than they were pre-pandemic.

When we think about household debt, Rice University’s Benedict Guttman-Kenney said it’s all about “how much more debt has someone taken on relative to their ability to repay it.” 

And this report shows that Americans are in a better spot to pay off their debt. That’s because income has grown an average of 6.2% annually, while debts have increased 4%. 

“We’re nowhere near the debt-to-income ratios that we saw kind of pre-the financial crisis, debt slow on, on those measures,” Guttman-Kenney said.

One can’t say the same for the U.S. government, though. Our national debt is around $36 trillion. Princeton’s Atif Mian said he has some concerns about how government debt could lead to higher long-term interest rates.

“Consumers obviously have a lot of debt on their heads, and if long-term interest rates were to rise, ultimately, those interest rates will have to get priced into mortgages, auto loans and so on,” Mian said.

For now, the aggregate picture of household debt in the U.S. looks pretty good. But that doesn’t mean people feel good about their debt, said Jesse Mecham, who founded the budgeting platform YNAB. 

“There are a lot of 40-year-olds that make way more money than they did when they were 30-something, and they are just as or more stressed about their money,” Mecham said. “And so that’s what tells you, it’s not an income issue.”

He said it’s easy to overspend with how much consumers use credit cards.

“Everything is stacked to get you to swipe and tap and buy and not think,” Mecham said.

Despite the bright spots in the report, delinquency rates are still a problem, meaning debt is a stress for plenty of American households.