Americans fell slightly further behind on their credit cards and other loans last quarter as household debt reached a record high, the Federal Reserve Bank of New York reported Wednesday.
The numbers offered a mixed overall picture of how borrowers are faring in the face of persistently high interest rates. Mortgage delinquencies rose slightly but remained near 20-year lows as homeowners continued to take advantage of low, fixed monthly payments.
But there were signs of stress elsewhere, with the share of credit card balances more than 30 days past due at 11.1%, the highest since early 2012. The overall share of debt in delinquencies rose from 3.2% in the spring to 3.5%.
The nation’s total debt reached a new high of $17.9 trillion, thanks to overall growth in mortgage, auto, credit card, education and other consumer debt.
In a positive development, incomes have grown faster than loans, NY Fed researchers noted in a blog post, meaning most households may be better positioned to meet their obligations. The country’s collective debt-to-income ratio stood at 82% in the third quarter, compared to 86% before the pandemic.
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The rising delinquencies appeared to be concentrated among younger and possibly lower-income borrowers, who are more likely to have credit card debt or a car loan than a mortgage, the researchers noted.
“While household balances continue to rise in nominal terms, income growth is outpacing debt burden,” Donghoon Lee, economic research adviser at the New York Fed, said in a statement. “Still, high default rates indicate stress for many households, even if the trend has moderated somewhat this quarter.”
Jordan Weissmann is a senior reporter at Yahoo Finance.
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