Consumer Delinquencies Hit Highest Level In Nearly A Decade

Delinquencies on U.S. consumer debt have risen to about 4.8% of all outstanding household debt as of Q4 2025, the highest share in almost ten years and the worst since around 2017.

What “highest in nearly a decade” means

• About 4.8% of all household debt (mortgages, credit cards, auto loans, student loans, etc.) was in some stage of delinquency at the end of 2025, up 0.3 percentage points from the prior quarter.

• That 4.8% level is the highest since 2017, which is why it is being described as the worst in nearly a decade, even though it is still close to pre‑pandemic norms rather than crisis levels like 2008–2009.

Where the stress is showing up

• The New York Fed reports that delinquencies are rising across products, with notable increases in mortgages and student loans entering early delinquency and more serious trouble in credit card balances.

• Young borrowers and lower‑income households are being hit hardest, contributing to what analysts describe as a more “bifurcated” economy where higher‑income households remain relatively stable while more vulnerable groups fall behind on payments.

Why this is happening now

• Household debt reached a record roughly 18.8 trillion dollars by Q4 2025, with mortgage balances and home‑equity lines of credit still climbing, which raises the fixed payment burden on many families.

• Rising living costs, pockets of labor‑market softening (especially for younger workers), and high interest rates on revolving credit like credit cards have made it harder for many consumers to keep up, even though overall economic indicators remain reasonably solid.

Is this a 2008‑style problem?

• Current delinquency levels are elevated compared with the last several years but are still far below the extreme levels seen during the Great Recession, and mortgage delinquencies in particular remain relatively low in national averages.

• The main concern policymakers are flagging is not broad systemic risk yet, but growing localized and demographic stress that could worsen if job markets weaken further or interest rates stay high for a long time.