American families are falling behind on their bills at a pace not seen since the Great Recession, according to new Federal Reserve survey findings reported this month — a warning sign that sits uneasily alongside otherwise steady headline economic numbers.
The survey found that the number of families at least two months behind on bill payments has risen 60 percent over the past three years, with the serious delinquency rate climbing to more than 8 percent, up from 5 percent in 2022, according to reporting on the findings. One in five households is behind on a loan repayment, the reports said.
How families are coping
Among adults who reported struggling with bills, 42 percent said they had delayed paying one or more bills, 23 percent said they had used credit cards to pay a bill over time, and 22 percent said they had relied on money from friends or family, according to the Federal Reserve’s economic well-being data cited in the reporting.
The squeeze follows a period in which households borrowed before the sharp rises in gasoline, grocery and other everyday prices. As the report put it, when families make borrowing plans, they assume a future ability to repay — and those assumptions have been upended by higher costs. Real median family income rose 7 percent in the survey period, while average income fell 6 percent, underlining how uneven the experience has been.
The wider debt picture
Separate data from the Federal Reserve Bank of New York’s Quarterly Report on Household Debt and Credit, reported by Reuters, shows total household debt rose 1 percent in the third quarter, or $197 billion, to $18.6 trillion. Mortgage balances rose $137 billion to $13.1 trillion, credit card balances rose $24 billion to $1.23 trillion, and student loans rose $15 billion to $1.65 trillion, while auto loan borrowing was stable at $1.66 trillion.
Delinquency rates have stabilised overall, the New York Fed said, with economic research adviser Donghoon Lee describing balances as “growing at a moderate pace, with delinquency rates stabilizing.” The exception is student loans, where 14.3 percent of accounts transitioned into serious delinquency as repayments resumed. Fed researchers warned that a softening jobs market, especially for younger and lower-income workers, could restart the rise in delinquencies.
For households, the practical step is triage: talk to lenders before a payment is missed, since hardship options usually close once an account is seriously past due, and prioritise the bills tied to housing, utilities and transport. Falling behind is now common enough that asking for help early is the normal move, not the exception.
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