Household debt delinquency rates showed signs of stabilization in the second quarter of 2026 as overall share of delinquency balances edged lower and the transition to seriously delinquent debt declined for the second consecutive quarter.
According to the latest Quarterly Report on Household Debt and Credit from the Federal Reserve Bank of New York, about 4.7% of outstanding household debt balances were in some stage of delinquency, a decrease of 0.1 percentage points (pp) from the previous quarter. Moreover, 3.3% of total household debt balances were seriously delinquent (at least 90 days delinquent) in the second quarter, down slightly from 3.4% in the first quarter.
The improvement occurred across most consumer loan categories. Serious delinquency rate for auto loans decreased to 5.5% from 5.6%, while credit card balances at least 90 days delinquent declined 0.2 pp to 12.9% in the second quarter. Nonetheless, credit cards continued to have the highest serious delinquency rate among the major debt categories. Housing-related debt had mixed results. The share of mortgage balances that were seriously delinquent fell to 0.99% from 1.1%. In contrast, the serious delinquency rate for student loans and HELOC edged higher to 10.6% and 0.99%, respectively.
The flow of balances newly entering a serious delinquency stage was more encouraging. Overall, 2.6% transitioned into serious delinquency during the second quarter, down from 2.8% in the previous quarter. This marked the second consecutive quarterly decline following a transition of 3.3% in the fourth quarter of 2025. Much of the decline was driven by student loans and credit cards. The share of student loan balances newly becoming seriously delinquent fell sharply to 7.8%, from 10.9% in the first quarter. Credit card transitions also declined to 6.97%, from 7.10%.
Mortgage transitions, however, continued to move in the opposite direction. The share of mortgage balances newly entering serious delinquency increased to 1.52%, from 1.48% in the first quarter. This category has been gradually trending upward in recent years, indicating some continued deterioration in mortgage credit performance even as the stock of seriously delinquent mortgage balances declined during the quarter. Auto loan transitions also edged higher to 3.0%.
