US Household Debt Delinquencies Stay Flat in First Quarter

in]ukt3[{t)p6p5fow9nxpb]_media_dl_1.png Federal Reserve Bank of New York

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(Bloomberg) — The share of overdue consumer loans stayed flat in the first quarter of 2026 as new delinquencies edged down.

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The total balance of loans delinquent at least 30 days remained unchanged at 4.8% from the prior quarter after six quarters of steady increase, according to data from the Federal Reserve Bank of New York’s Quarterly Report on Household Debt and Credit released Tuesday. Still, the overall delinquency rate matched the highest level reported since 2017. 

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The pace of transitions into new delinquencies edged down for most categories with the exception of auto loans and home equity lines of credit, the report showed. Student loans continued to show serious stress, with 11% falling into early delinquency, but that was an improvement from 16% in the fourth quarter of 2025.

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Overall, the pace of loans falling into serious delinquency — more than 90 days overdue — also slowed.

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“Delinquency transition rates were mostly steady, while student loan delinquencies are returning to pre-pandemic levels,” said Daniel Mangrum, Research Economist at the New York Fed in a press release.

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Student loans defaults spiked in 2025 after the government ended a years-long payment freeze. The overall share of student loans delinquent more than 90 days rose in the first quarter of the year, to the highest since early 2020.

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In a separate release, New York Fed researchers said they found the average student loan borrower who is entering default is nearly 40 years old, was not delinquent prior to the pandemic and is more likely to live in the South. 

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“While defaulted borrowers are more likely to be past due on other forms of debt, the overall scope of student loan defaults is still relatively low, suggesting that fears of broader contagion to other credit products are premature,” researchers said. 

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The report reflects the challenges households face, as interest rates are likely to stay high for longer amid a surge in energy costs. Fed officials left their benchmark rate steady last month, arguing the war in Iran increases the uncertainty around the economic outlook. A report released Tuesday showed inflation accelerated 3.8% in April from a year earlier, the fastest pace since 2023.

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Policymakers have increasingly pointed to signs of a two-tiered economy, where economic resilience is sustained by higher income households. New York Fed president John Williams said last week there’s strong evidence confirming a so-called K-shaped economy. Recent research showed real spending growth has been limited to upper income households since 2023. 

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The share of credit card delinquencies more than 90 days overdue rose at the beginning of the year and is at the highest level since 2011, the report also showed.

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Overall household debt rose by $18 billion in the first quarter to $18.8 trillion.

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