Squeezed by inflation, more Americans are falling behind on debt payments

Recent financial measures show more Americans are struggling to keep up with debts as prices weigh on household finances. Mortgage arrears have reached their highest point in six years, though they remain well below levels seen during the Great Recession.

Federal Reserve survey data found that nearly 9% of households devoted over 40% of their income to debt payments in 2025. That was the largest share since 2010.

Older adults are also facing growing difficulties. People over 70 have recorded their highest rates of overdue auto loans since the New York Fed began tracking them in 2000, while their credit card delinquency rate is at its highest since 2011.

A March Debt.com survey found that more than half of respondents used credit cards for essentials such as food, housing and utilities. Nearly six in 10 said inflation had left them with a larger card balance than a year earlier.

Financial planner Kelly Regan said rising costs can push people toward borrowing when savings run short, especially if pay increases lag behind prices. Economists say weaker purchasing power is also weighing on consumer confidence; the latest figures point to continued pressure on household budgets.