About a week ago, an economist and housing analyst noticed some patterns in government consumer debt data that raised concerns for multifamily owners, investors, and operators.
Industry expert Greg Willet, chief economist at LeaseLock, posted on LinkedIn that the latest statistics from the Federal Reserve Bank of New York showed U.S. households carrying $1.211 trillion in credit card debt. According to the New York Fed’s release about the data and the report itself, that would be an annual increase of almost 7.3%.
“I keep a watch on these debt statistics, viewing shifts in the numbers that might alter the ability of households to meet their housing payment obligations,” Willet wrote. “While I wouldn’t put any of the current metrics into red flag territory, it’s worth noting how quickly some households are running up credit card debt at the same time that payment delinquencies are beginning to rise.”
The clear concern for the multifamily industry is that consumers facing heavy debt service pressures are at greater risk of being unable to maintain timely financial commitments like rents, as credit card use and delinquency rates are increasing.
By age, the younger the credit card users, the higher the transition into serious delinquency. From 18 to 29, the transition rate was 10.76%; for 30 to 39 it was 9.03%; 7.81% for 40 to 49; 6.52% for 50 to 59; 4.99% for 60 to 69; and 5.59% for 70 and older.
Some caveats. The data from the New York Fed comes from a consumer credit panel undertaken with Equifax. Much of the report is calculated with a 289,000-individual primary sample. The credit card data disagrees significantly with the Federal Reserve numbers in the table, Selected Assets and Liabilities of Commercial Banks in the United States.
The Federal Reserve numbers compile information from commercial banks that, as of March 5, 2025, showed credit card and other revolving credit plans totaling $1.090 trillion in size, a difference of $121 billion, or 11.1%. The delinquency rate on such loans was 3.08% in Q4 2024.
The New York Fed has known about this difference for years, with an approximate 37% gap between the two and the difference is “substantially larger for households with three or more adults than for single and two-adult households.”
The differences could be for a number of reasons but there is no definitive answer as to which is correct. However, although a gap exists, the two sets of data tend to show similar trends, so general concern over risk remain.
Source: “Multifamily Watches as Credit Card Debt and Delinquencies Rise”
