Warning Lights Flashing Red for Household Finances Across The Country
Credit-card debt and delinquencies are climbing, auto repossessions have hit highest levels since 2009, and more homeowners are missing mortgage payments, signs that household budgets are tightening.
Raleigh, NC, Oct. 18, 2025 — Household budgets are under pressure. Across North Carolina and much of the country, the financial cushion that many families built during the pandemic has eroded.
The national economy continues to show strength in job creation, yet a growing share of households are falling behind on everyday bills. According to the Federal Reserve Bank of New York, total U.S. household debt reached $18.4 trillion in mid-2025, up nearly $1.4 trillion from two years earlier, the highest in history.
That figure translates to roughly $143,000 in total debt per U.S. household that carries debt, including mortgages, credit cards, student loans, and auto financing.
Nowhere is the strain more visible than in revolving credit.
Americans collectively owe more than $1.2 trillion in credit-card debt, an increase of nearly 6 percent in just one year.
Among the 45 percent of all households that carry balances, that amounts to about $9,300 per indebted household, the highest ever recorded.
The delinquency rate (30+ days past due) on credit card loans stands at 3.1 percent, nearly twice its 2021 level.
Serious delinquencies (90+ days past due) rose 8.5 percent in the first quarter of 2025, showing that more late accounts are sliding toward default.
In the end, more families are paying more interest on record-high balances, leaving less disposable income for housing, utilities, or savings.
Auto Repossessions and Student Loans Add to the Load
The financial pressure extends beyond credit cards. Auto-loan delinquencies continue to rise, with vehicle repossessions now at their highest level since 2009. Americans owe roughly $1.7 trillion in car loans, and the average monthly payment has climbed to more than $750. That leaves little margin for households facing unexpected expenses or job interruptions.
Meanwhile, after years of pandemic-era pauses, student loan delinquencies have grown sharply. When federal reporting resumed in late 2024, the share of student debt 90+ days delinquent jumped to 7.7 percent, up from less than 1 percent during the moratorium. Overall student-loan balances now total about $1.6 trillion, or about $35,000 per borrower. The resumption of payments has further tightened budgets, particularly among younger and middle-income households already contending with higher housing and transportation costs.
The Southeast Is Feeling The Pressure
Across the South, including North Carolina, South Carolina, and Georgia, financial warning lights are flashing more brightly than elsewhere.
A Consumer Financial Protection Bureau study of rural Southern states found that 28 percent of households have medical debt in collections, far above the national average of 17 percent. In the same region, 21 percent of borrowers are at least 60 days behind on student loan payments, and nearly 18 percent are late on credit card payments.
Rising home-insurance premiums and property taxes are also straining budgets. The Mortgage Bankers Association reports that Florida, South Carolina, and Georgia saw some of the steepest year-over-year increases in mortgage delinquencies. In North Carolina, particularly in high-growth counties such as Wake and Johnston, early-stage delinquencies have edged higher as household cash reserves thin out.
The Urban Institute estimates that more than 40 percent of residents in several South Carolina counties have at least one debt in collections. North Carolina’s statewide rate is somewhat lower. Still, the state’s CredAbility Consumer Distress Index, a composite measure of household financial health, has weakened over the past year, reflecting heavier credit use and persistently high living costs.
How Today Differs From 2008
The pattern of household stress today differs from that during the 2008–2009 financial crisis. Then, the collapse in home values triggered a wave of foreclosures and job losses. Now, the strain is distributed across multiple types of debt, credit cards, car loans, student loans, and everyday expenses, with less concentrated risk but a far wider reach.
Borrowing costs are a significant factor.
The average credit-card APR has risen from about 13 percent in 2010 to more than 21 percent today.
The average used-car loan rate has doubled over the past three years, from roughly 5 percent to over 10 percent.
In North Carolina, homeowners’ insurance premiums have climbed nearly 40 percent since 2020, according to the N.C. Department of Insurance.
These increases mean that maintaining existing debt now consumes a larger share of income. Even families with stable employment are finding that the same paycheck no longer stretches as far as it did only a few years ago.
What the Next 12–24 Months Could Bring
Economic forecasts suggest that the next two years will determine whether the situation stabilizes or worsens.
If inflation continues to cool and wages rise modestly, delinquency rates could level off as households adjust. But if job growth slows or borrowing costs remain high through 2026, analysts expect defaults and repossessions to increase, particularly in Southern states where savings rates are lower and credit utilization is higher.
TransUnion’s 2025 Consumer Credit Forecast anticipates another slight uptick in serious credit-card delinquencies, to around 2.8 percent, while auto-loan defaults could rise slightly faster.
For North Carolina, steady population growth and a diversified job base offer some resilience, but the state is not immune. Many middle-income households are already devoting a larger share of their paychecks to debt service, insurance, and housing costs. Without relief from interest rates or cost pressures, those trends are likely to persist.
Bottom Line: The Red Lights Are On
The U.S. economy may still appear healthy in aggregate, but the financial health of households, especially across the Southeast, is showing clear signs of stress. Rising delinquencies, heavier debt loads, and dwindling savings point to a widening gap between national economic headlines and daily financial reality.
In practical terms, the data suggest that while the broader economy’s gauges remain green, Main Street’s dashboard is already blinking red, one overdue payment at a time.
Sources
Federal Reserve Bank of New York – Household Debt and Credit Report (Q2 2025): https://www.newyorkfed.org/microeconomics/hhdc
YCharts – Total U.S. Credit Card Debt (Q2 2025): https://ycharts.com/indicators/us_credit_card_debt
Federal Reserve Bank of St. Louis – Credit Card Delinquency Rates (DRCCLACBS): https://fred.stlouisfed.org/series/DRCCLACBS
PYMNTS.com – 90-Day Credit Card Delinquencies Surge (Q1 2025): https://www.pymnts.com/debt/2025/federal-reserve-data-shows-card-balances-decline-q1-90-day-delinquencies-surge
Federal Reserve Financial Stability Report (April 2025): chrome-https://www.federalreserve.gov/publications/files/financial-stability-report-20250425.pdf
Consumer Financial Protection Bureau – Consumer Finances in Rural Areas of the Southern Region (2023): https://files.consumerfinance.gov/f/documents/cfpb_or-data-point_consumer-finances-in-rural-south_2023-06.pdf
Mortgage Bankers Association – Mortgage Delinquency Survey (Q2 2025): https://www.mba.org/news-and-research/newsroom/news/2025/08/14/mortgage-delinquencies-decrease-slightly-in-the-second-quarter-of-2025
TransUnion – 2025 Consumer Credit Forecast: https://newsroom.transunion.com/2025-Consumer-Credit-Forecast