Debt payments take the same share of income as a year ago while saving falls to 3.8%

Households' required debt payments took 11.11% of disposable income in the second quarter of 2026, almost exactly the 11.12% of a year earlier, even as the personal saving rate fell to 3.8% in September, according to Federal Reserve and Bureau of Economic Analysis data compiled by the Federal Reserve Bank of St. Louis.

What the data show

The Federal Reserve's household debt service ratio measures required payments on mortgages and consumer debt, such as credit cards, auto loans and student loans, as a share of disposable personal income. It was 11.11% in the second quarter, the latest reading, against 11.12% in the second quarter of 2025 (a difference of 0.01 percentage point, computed) and 11.32% in the fourth quarter of 2025, the highest of the last two years in the series.

The mortgage part of the ratio was 5.83% in the second quarter against 5.83% a year earlier and 5.92% in the fourth quarter of 2019. The consumer debt part was 5.28%, against 5.30% a year earlier and 5.81% in the fourth quarter of 2019, a difference of 0.53 percentage point (computed) from the end of 2019.

For a longer view, the total ratio peaked at 15.85% in the fourth quarter of 2007 and was at its lowest, 9.05%, in the first quarter of 2021. The latest reading is 4.73 percentage points (computed) below the 2007 peak and 2.06 points (computed) above the 2021 low.

The two parts add up to the total: 5.83% for mortgages and 5.28% for consumer debt make the 11.11% (computed). Compared with the fourth quarter of 2019, before the pandemic, the total is 0.62 percentage point lower (computed), and most of that difference is in consumer debt, where the ratio is 0.53 point lower, against 0.09 point lower for the mortgage part (computed).

Delinquency and card pricing

Payments are being made. The share of credit card loans at commercial banks that were delinquent was 2.85% in the second quarter, the lowest of the last eight quarters and down from 3.20% in the third quarter of 2024, a fall of 0.35 percentage point (computed). The all-time high in the series, 6.77%, came in the second quarter of 2009. FinanceInTime has reported on the same Federal Reserve data, including a rise in student-loan delinquency and forbearance that is not part of the card measure.

Card pricing has not changed much. The Federal Reserve's series for the interest rate on credit card plans at commercial banks, all accounts, was 21.19% in August 2026 against 21.39% in August 2025, a decline of 0.20 percentage point (computed). August is the latest reading.

Balances are higher. Credit card loans at commercial banks were $1,105.9 billion in the week of October 14, up 4.9% (computed) from $1,054.6 billion in the week of October 15, 2025. The balance figure does not adjust for inflation, and prices rose 3.6% from a year earlier in September, according to the BEA's PCE price index.

What has changed in household budgets

Two things moved the other way. The personal saving rate fell to 3.8% in September from 5.1% a year earlier, a drop of 1.3 percentage points (computed), and inflation-adjusted disposable income fell 0.3% in September from August, the BEA said, as FinanceInTime reported. In a Fed survey, as FinanceInTime reported on October 27, median family income rose 7% while the share of families behind on loan payments neared 20%.

These facts do not contradict each other. A ratio of payments to income can stay flat because most mortgage payments are fixed, while saving falls because spending on other goods and services rose faster than income. The data do not show why, however, and no source cited here states a cause.

Measure	Latest	A year earlier
Household debt service ratio	11.11% (Q2 2026)	11.12% (Q2 2025)
Mortgage debt service ratio	5.83% (Q2 2026)	5.83% (Q2 2025)
Consumer debt service ratio	5.28% (Q2 2026)	5.30% (Q2 2025)
Card loan delinquency rate	2.85% (Q2 2026)	3.04% (Q2 2025)
Card interest rate, all accounts	21.19% (August 2026)	21.39% (August 2025)
Personal saving rate	3.8% (September 2026)	5.1% (September 2025)

Source: Federal Reserve and BEA data compiled by the Federal Reserve Bank of St. Louis (FRED).

Reading the two measures together

The saving rate was 5.6% in January 2026 and 3.8% in September, a drop of 1.8 percentage points (computed) in eight months, according to the same St. Louis Fed compilation. Over those months the debt service ratio moved from 11.16% in the first quarter to 11.11% in the second, a change of 0.05 percentage point (computed). Households were setting aside less of their income, but their debt payments were not taking more of it.

This matters for how the data are read. A falling saving rate and a rising debt service ratio together would suggest households were squeezed from both sides. The second quarter's numbers show only the first of those two.

What to watch

The next reading of the household debt service ratio, for the third quarter, has not been scheduled in the sources used here. The BEA's October personal income and outlays release is due on November 25 at 8:30 a.m. ET, according to its release page, and will show whether the saving rate moves further from the 3.8% of September.

If the saving rate keeps falling while payments remain a steady share of income, the ratio would still look unchanged, which is why the two measures are read together. A rise in the debt service ratio would require higher payments, higher debt balances or lower income. The third-quarter data have not been published.