August Update: Seasonal Trends, Consumer Credit Weakness Deepens While Unsecured Outperformance Persists

Our latest performance report is now available.

Quick Insights

Consumer Unsecured: Outperformance Holds Through Seasonal Headwinds

• August is typically a weaker month, but Consumer Unsecured outperformed seasonally adjusted comps across all metrics
• 30+ Impairments rose only 2 bps MoM, far below seasonal norms
• Cure and Made Payment rates hit new record highs on a 3-month average basis, eclipsing even 2021 peaks
• Impairments Net Charge-offs improved materially, with YoY declines >20 bps for the 11th time in 12 months

Federal Reserve Data: Credit Weakness at Historic Levels

• Consumer credit fell in Q2 across most income cohorts, marking the weakest Q2 since 2010
• YoY credit growth remains negative for the third consecutive quarter, unprecedented outside the GFC
• Adjusted for lower charge-offs, today’s credit contraction may be as deep—or deeper—than post-GFC
• The Top 1% income cohort has held >40% of all consumer credit for 11 straight quarters, the longest streak on record

Household Net Worth: Real Estate Surprise, Equity Gains Lead

• Net worth rose materially across all cohorts in Q2, driven by equities, pensions, and real estate
• Real estate net worth grew 2% but remains below prior peaks; Zillow data suggests DFA continues to understate values
• Since 2022, Bottom 80% cohorts have added $1.6T in real estate assets against $630B in new mortgage debt, but true price appreciation appears far lower than Zillow’s reported 10%+