Mortgage balances led the rise, growing by $131 billion to $12.94 trillion as housing activity remained stable despite affordability concerns. Auto loan originations also climbed, totaling $188 billion \u2014 up from $166 billion in Q1. Credit card balances rose by $27 billion, while lenders expanded aggregate credit limits by $78 billion, pointing to continued lender optimism in extending consumer credit.\u00a0<\/p>\n
But that expansion came alongside rising signs of financial pressure. Student loan delinquencies<\/a> surged as paused missed payments resumed reporting. The share of seriously delinquent student debt jumped to 12.9% \u2014 up from just 0.8% a year ago. More than 2.2 million borrowers saw their credit scores fall by over 100 points, and 1 million lost at least 150. Bloomberg Economics estimates<\/a> these credit shocks could pull $63 billion in consumer spending out of the economy on an annualized basis.<\/p>\n Delinquency rates for mortgages and home equity lines of credit also ticked up, though performance remains strong relative to historical benchmarks. Still, rising mortgage costs<\/a> have pushed 70% of households earning more than $100,000 into living paycheck to paycheck \u2014 a sharp shift in financial stability among higher-income consumers.\u00a0<\/p>\n As traditional credit becomes harder to manage, younger consumers are turning to alternatives. Buy now, pay later<\/a> (BNPL) usage continues to rise, especially among Generation Z and younger millennials \u2014 58% of whom now prefer BNPL over credit cards. That shift is also shaping commerce habits: 43% of shoppers<\/a> now choose merchants based on whether installment plans are available.<\/p>\n At the same time, 69% of Gen Z consumers<\/a> report living paycheck to paycheck. One in three U.S. adults<\/a> also said they experience surprise expenses of several hundred dollars each year \u2014 making short-term financing tools more of a necessity than a convenience.\u00a0<\/p>\n Together, these trends reveal a consumer credit landscape in flux. Borrowing continues to rise, but so do the risks tied to repayment, especially for younger and mid-income households navigating higher costs and shrinking buffers.<\/p>\n","protected":false},"excerpt":{"rendered":"Mortgage balances led the rise, growing by $131 billion to $12.94 trillion as housing activity remained stable despite…\n","protected":false},"author":3,"featured_media":123406,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[64,38360,79,75842,14231,50,27912,751,67,132,68],"class_list":{"0":"post-123405","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-credit","10":"tag-economy","11":"tag-federal-reserve-bank-of-new-york","12":"tag-loans","13":"tag-news","14":"tag-personal-finances","15":"tag-pymnts-news","16":"tag-united-states","17":"tag-unitedstates","18":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/114981482315558721","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/123405","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=123405"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/123405\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/123406"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=123405"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=123405"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=123405"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}