Consumer Payment Delays in the U.S. at Their Highest Since 2017

Increase in Delinquency Rates on Consumer Debt in the U.S.

Payment delays among consumers in the U.S. rose to 4.8% of household debt in the fourth quarter, reaching the highest level since 2017. This situation is largely attributed to increasing delinquency rates, particularly among low-income and young borrowers.

New York Federal Reserve Report: Polarization Deepens

The Household Debt and Credit Report published by the New York Federal Reserve (Fed) has revealed that overall delinquency rates are approaching pre-pandemic levels. However, the increase among borrowers in the lowest income group indicates a deepening polarization in the economy.

Largest Delays in Mortgage Payments

The report emphasizes that the primary reason for payment delays is mortgage payments. Research shows that delays are particularly concentrated in low-income areas. Additionally, the rise in student loan payments that began after the pandemic is also contributing to the increase in delays.

Young Unemployment Rate and Debt Payment Difficulties

New York Fed Economic Research Advisor Wilbert van der Klaauw noted that household debt levels have modestly increased while emphasizing that delays in mortgage payments continue. Since 2021, the young unemployment rate has approached a peak of 10.4%. In the fourth quarter, 16.3% of student loan debts fell into delinquency, marking the highest increase seen since 2004.