(CNN) — Americans, by and large, are not letting their debt get too unwieldy in spite of persistently high inflation and choppy economic developments, new data from the Federal Reserve Bank of New York showed Tuesday.
However, this is not a one-size-fits-all economy, and the latest data shows growing fractures. More US households are having trouble keeping up with their mortgage payments and other debt.
More people went at least 30 days late on their mortgage payments in the second quarter of this year than at any quarter since 2015, according to the New York Fed’s latest Quarterly Report on Household Debt and Credit. A greater share of loans also went into serious delinquency – or 90 days late or more – on their car payments during the same time period than at any quarter since 2010.
Still, while those delinquency rates remain elevated from where they were pre-pandemic, they’re holding fairly stable and not deteriorating to the rates seen during the Great Financial Crisis, New York Fed researchers said.
Tuesday’s report is the latest piece in a trove of data that highlights the mixed experiences that people are facing in the American economy.
“You really do have a lot of people who are doing just fine and spending because they feel good, and they’re secure in their jobs,” Matt Schulz, consumer finance analyst for LendingTree, told CNN. “But then you have an awful lot of people who are really struggling and really nervous because of high prices and a challenging job market.”
Overall US household debt balances edged down by $13 billion, or 0.1%, to $18.8 trillion during the second quarter. However, the decline is largely an artifact of a quirk in how mortgage loans were recorded during the quarter, researchers noted.
Mortgage loan balances’ $74 billion decline during the quarter was attributed to a “servicer transfer gap” of delayed credit reporting when a mortgage is transferred from one servicer to another. This is likely to be reversed next quarter, New York Fed researchers said.
If it wasn’t for those gaps, mortgage balances would have remained flat for the quarter (which would have resulted in overall debt balances increasing by $61 billion, or 0.3%). Outside of mortgages, most balances increased across the major credit categories of home equity, student, auto, credit card and personal.
Higher debt balances – even record-high ones – are to be expected. For one, the New York Fed data is not adjusted for inflation (and we’ve seen faster-than-normal price hikes for five years running). But those balances also can increase because of factors such as population growth, e-commerce activity and economic conditions that help power consumer spending.
This is a developing story and will be updated.
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