Americans have more debt than ever, and more people are falling behind on paying it.
Total household debt grew to a record $17 trillion in the first quarter of 2023, an uptick from $16.9 trillion in the previous quarter, according to the Federal Reserve Bank of New York’s household debt and credit report released Monday.
Also on the upswing was the number of loans more than 90 days behind, with accounts increasingly falling into delinquency for every type of loan other than student loans (which are still subject to a federal pandemic relief pause on payments and interest.)
Delinquency rates are still well below pre-pandemic levels, but underscore the increasing pressure that household budgets have faced in recent months. Previous research has shown that high inflation—and higher interest rates on loans because of the Federal Reserve’s anti-inflation interest rate hikes—have made more people fall behind on their bills.
The amount of new mortgage debt decelerated, highlighting a recent slowdown in the mortgage market. Mortgage debt rose half as fast in the first quarter of 2023 as it did from the previous quarter.
High interest rates, home prices, and homeowners reluctant to sell because of the low mortgage rates they locked in during the pandemic have all worked against people taking out new home loans.