Middle-income families saw a modest improvement in spending power last month, according to the latest Primerica Household Budget Index. The index hit 100.1% in May 2025, which is up 0.4% from April and 1.5% year-over-year, signaling that earned income slightly outpaced the rising cost of essential goods like food, utilities, gas, health care, and auto insurance.
But at the same time, VantageScore’s CreditGauge data showed early-stage mortgage delinquencies climbed in May, suggesting pockets of financial stress may be emerging among borrowers, especially in credit segments not traditionally considered high risk.
🔍 Why it matters: The combination of gradually improving wage-based purchasing power and rising credit delinquencies paints a nuanced picture. Consumers may be keeping up with day-to-day costs, but increasing debt levels and cracks in mortgage repayment suggest potential challenges ahead for financial stability — even among prime and superprime borrowers.
💡 Driving the news:
- Primerica HBI
- Index at 100.1% in May — baseline is Jan 2019.
- Necessity item costs rose 2.5% YoY vs. 2.8% overall inflation for middle-income households.
- Slight edge: Wage growth outpaced inflation on essential items.
- VantageScore CreditGauge
- Mortgage delinquencies rose from 0.92% in April to 1.03% in May.
- Early-stage delinquencies (30-59 DPD) increased in nearprime, prime, and superprime tiers.
- Average credit balance hit $106,000 in May — a five-year high.
🧠 What we’re watching: Despite signs of recovery in spending power, delinquencies in mortgage payments — often the last bill consumers default on — could be an early warning of deeper financial strain. The rising balances and broader credit delinquency trends are especially notable among consumers with stronger credit profiles.
📊 Between the lines:
