US household delinquencies rise slightly, New York Fed report shows | Today’s news
(Bloomberg) — U.S. consumers are increasingly falling behind on their debt as they face higher costs for fuel, food and other goods.
The share of delinquent consumer loans rose slightly to 5% in the third quarter from 4.7% in the previous quarter, according to the Federal Reserve Bank of New York’s quarterly report on household debt and credit released on Tuesday. Total household debt rose 1.8% to $19.1 trillion.
The share of mortgage balances more than 90 days past due rose to 1.13%, the most since the first quarter of 2018. The portion of mortgage debt that moves into early and severe delinquency increased but remained close to pre-pandemic norms, New York Fed researchers said.
“Although the rate of home loan delinquency has crept up, the overall credit quality of these loans remains strong,” Donghoon Lee, economic research adviser at the New York Fed, said in a news release.
Home equity line of credit balances rose $23 billion, the largest increase since 2005 and the 18th consecutive quarter of growth.
The proportion of debts that became newly delinquent also increased for car loans. Student loan balances rose slightly, but loans went into default at a slower rate.
Delinquency has also improved for credit cards. In a blog post accompanying the data, New York Fed researchers found that delinquency rates for cards opened during the pandemic — when issuances for consumers with lower incomes and credit scores increased — are falling.
“If current patterns persist, the increased delinquency of the past few years may turn out to be more of an echo of the pandemic era than a permanent feature of the credit card market,” they wrote.
Separate data released Tuesday by the Urban Institute, a Washington, D.C., think tank, suggests people have fallen further behind on debt since the pandemic.
About 5.8% of Americans have at least some delinquent credit card debt, with an average of $680 in delinquent debt. That’s up from 4.3% who had some type of credit card default in August 2019, according to the institute’s research. About 5.5% of consumers have some type of default on auto and retail loans, compared to 3.9% in August 2019.
Nationally, about 24% of U.S. consumers with a credit file in collections have debt of any kind, according to the institute. That’s down from the roughly 30% of people who had debt in collections just before the pandemic, though part of the improvement likely stems from delays in reporting collections to credit bureaus, said Breno Braga, a senior fellow at the institute.
Residents of ZIP codes with a majority of people of color are 50% more likely to have debt in collections than residents of predominantly white areas, a study found.
The institute tracked the share of people across the United States with debt in collections or in default by taking a representative sample of Credit Bureau records from August 2026.
Consumer price data released on Tuesday showed that core inflation, excluding food and energy, rose 0.3% in October from a month earlier, beating estimates for the third straight month.
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