Q4 household debt delinquencies hit 4.8%, the highest level since 2017. But the headline number obscures a more troubling reality: this isn’t a broad-based crisis. It’s a targeted one.
Young and low-income borrowers are bearing the brunt.
Student loan delinquencies are up 16.3%, the largest quarterly jump since tracking began in 2004, while credit card delinquencies reached 12.7%, highest since 2011. Auto loan serious delinquencies hit 5.2%, approaching 2010 peaks, and mortgage delinquencies are concentrated in lower-income ZIP codes and regions with falling home prices.
Meanwhile, overall household debt climbed to $18.8 trillion in the quarter, up 1% from Q3.
The jobs picture tells the rest of the story: unemployment for workers aged 16-24 reached 10.4% in December, near pandemic-era highs.
We’re witnessing an increasingly bifurcated economy. Aggregate numbers suggest stability, but beneath the surface, financial stress is concentrating among the most vulnerable segments.
