Does a jump in overdue utility bills suggest mortgage pain is ahead?
A fresh examination of consumer credit data has revealed a marked rise in overdue utility bills across the United States, underscoring growing financial stress among households and raising new concerns for lenders watching early signs of delinquency risk.
The Century Foundation’s latest analysis shows that past-due utility balances climbed sharply between the second quarters of 2024 and 2025. Average arrears rose nearly 10% to just under $800 as energy costs continued their upward march. Monthly bills for electricity and natural gas increased by roughly 12% over the same period.
Although utility accounts rarely dominate economic headlines, analysts note that these payments sit near the top of household budgeting priorities — typically alongside mortgage instalments and vehicle finance. When families fall behind on essential energy bills, it often signals trouble elsewhere in the balance sheet. Research suggests almost six million households now carry utility debt serious enough that it may soon be reported to collection agencies.
This trend is part of a broader pattern of rising financial strain, according to Andy Harris, president of Vantage Mortgage Brokers, “It's no surprise that utility bill delinquencies are rising," he told Mortgage Professional America.
"When consumers begin falling behind on unsecured debts and essential transportation or educational loans, missed utility payments typically follow, affecting both homeowners and renters. These are the types of trends policymakers, lenders, and consumer-facing industries watch closely. Even mortgage delinquencies, historically the bill most households prioritize above all others, have climbed to their highest level in eight years. When the most essential obligations begin to slip, it signals a broader affordability crisis playing out in real time.”
The data are politically charged, arriving as the White House faces voter discontent over the cost of living. Energy prices have become a sensitive flashpoint, particularly in regions contending with grid constraints and rising demand from new energy-intensive industries such as data-centre development. While federal officials argue that rate-setting lies largely with state regulators, critics maintain that national policy choices are amplifying pressure on consumers.
Advocacy groups involved in the analysis warned that escalating arrears reflect a wider affordability challenge confronting working families. They point to reduced federal consumer-protection capacity and slower progress on renewable generation as factors that could leave households increasingly exposed to price volatility.
For the mortgage industry, the findings merit close attention. The New York Federal Reserve has already reported gradual increases in delinquency rates across major credit categories over the past year. While mortgage arrears remain comparatively low, analysts caution that utility stress often emerges earlier in the cycle than missed housing payments. Should energy burdens continue to rise into winter, lenders may see a softening in borrower resilience — particularly among lower-income homeowners already contending with elevated insurance premiums and other non-discretionary expenses.
Banks monitoring card-spending data maintain that consumers overall appear financially stable for now. Yet the sharp rise in essential-service arrears presents a notable counter-signal. For originators and servicers, the latest figures offer both an early risk indicator and a reminder to review hardship-assistance protocols as household budgets tighten heading into 2026.
