Q1 NY Fed Report: Credit Scores for Mortgages Still Solid, Foreclosures Increase Slightly

The NY Fed released the Q1 Quarterly Report on Household Debt and Credit this morning.

he Federal Reserve Bank of New York’s Center for Microeconomic Data today issued its Quarterly Report on Household Debt and Credit. The report shows total household debt increased by $18 billion, just a 0.1% increase, in Q1 2026, to $18.8 trillion. … Mortgage balances grew by $21 billion in the first quarter and totaled $13.19 trillion at the end of March. Home equity lines of credit (HELOC) balances rose by $12 billion totaling $446 billion, $129 billion above the low reached in Q1 2022.

The first graph shows household debt increased slightly in Q1. Household debt previously peaked in 2008 and bottomed in Q3 2013. Unlike following the great recession, there wasn’t a decline in debt during the pandemic.

The second graph shows the percent of debt in delinquency. The overall delinquency rate was mostly unchanged in Q1, although serious delinquent loans increased.

From the NY Fed on delinquencies:

Aggregate delinquency rates were flat in the first quarter of 2026. As of the end of March, 4.8% of outstanding debt was in some stage of delinquency, roughly the same as the share from 2025Q4. Transition into early delinquency held steady for auto loans, but ticked down for credit cards, from 8.7% annually to 8.6%, and for mortgages from 3.9% to 3.8%. Transition rates into serious delinquency were mostly unchanged for auto loans and credit cards, but increased slightly for mortgages from 1.4% annually to 1.5%.

emphasis added

Here are a few mortgage charts from the report. The first graph shows mortgage originations by credit score (this includes both purchase and refinance). Look at the difference in credit scores in the recent period compared to the during the bubble years (2003 through 2006). Recently there have been almost no originations for borrowers with credit scores below 620, and few below 660 – although there has been an increase in originations for borrowers in the 660 to 760 range. A significant majority of recent originations have been to borrowers with credit score above 760.

Solid underwriting is a key reason I’ve argued Don’t Compare the Current Housing Boom to the Bubble and Bust, Look instead at the 1978 to 1982 period for lessons

Here is another way to look at the credit scores by origination over time. There was a significant decline in credit scores during the bubble.

Transition Rates for Current Mortgages

A possible concern was the recent increase in transition rates from current to 30-60 days late. This decreased in Q1 and is close to pre-pandemic levels.

However the transition to 90+ days late is increasing.

And here another look at the transition to serious delinquencies. Most short-term delinquencies transition back to current. The transition to seriously delinquent (90+ days) increased in Q1. This something to watch and could lead to a pickup in foreclosures.

Foreclosures Increase Slightly

Foreclosures are still below pre-pandemic levels and far below bust period foreclosure levels.

And as a “bubble” reminder, here is graph of percent new foreclosures by state (the “sand states” Nevada, California, Florida and Arizona saw that largest number of foreclosures during the housing bust). Now no state really stands out, although Florida and Nevada are leading the pack and California is in the best shape.

There is much more in the Q1 report.