If you’ve been watching the economy lately, you’ve probably noticed something: despite positive results in many areas, including October job growth, people are feeling the strain. No one can predict a recession with absolute certainty, but the warning lights around consumer finances are getting harder to ignore. For HOA and COA boards—and the management companies that support them—these signals matter. A lot.
Because when homeowners start falling behind in their personal finances, community assessments are often the first bill they delay. Let’s break down what’s happening and why associations should be paying attention now, not later.
Credit Stress Is Building, and Fast
Credit card delinquencies have been marching upward since late 2022, and the trend hasn’t slowed. In fact, the share of credit card balances that are 30+ days delinquent reached roughly 14% in Q1 2025. And the more serious category—90+ days delinquent—isn’t far behind, hitting around 12.3%.
Those aren’t small jumps. They’re the highest levels in years.
Even major banks see what’s coming. Institutions like JPMorgan Chase and Citigroup have been quietly increasing their loan-loss reserves. They don’t do that unless they expect more consumers to fall behind, and many analysts believe the real fallout will appear in 2026.
Household Debt Is Reaching a Tipping Point
Americans now owe a record-breaking $1.29 trillion in credit card debt. The average household balance is hovering near $10,900, numbers not seen since the Great Recession.
Why? Families are leaning on credit to manage everyday expenses. Inflation remains stubborn. Interest rates are still at twenty-year highs. Wages haven’t kept pace. That means people are using credit cards to fill the gaps, and those gaps keep widening.
And when homeowners have to choose which bills to pay first, HOA assessments—rightly or wrongly—get labeled as “optional” or something that can wait. That’s when delinquencies start creeping into associations that previously had no issues.
The Credit-Score Hangover Is Here
For years, stimulus-era savings and payment protections helped Americans maintain or even improve their credit scores. That moment has passed.
Credit scores are now declining for the first time in a decade.
Take auto loans. Subprime borrowers are showing 60+ day delinquencies of around 6.6% as of January 2025—the highest in decades. This is a serious early warning sign because these same households struggle first (and hardest) when the economy tightens.
At the same time, subprime borrowers now hold 22.1% of total credit card debt (up from 16.4% just a quarter earlier). Bank-card debt overall has jumped to about $233 billion. These shifts suggest mounting stress among the very consumers most likely to fall behind on HOA and COA assessments.
Why Management Companies Need to Pay Attention
What happens in the broader consumer credit market doesn’t stay there. It eventually shows up in your association’s receivables.
When budgets tighten, homeowners prioritize mortgage payments, auto loans, and utilities—everything tied to immediate consequences. Associations fall into the category of “I’ll deal with that later.”
That’s why communities that have never struggled with delinquencies may suddenly find themselves facing rising balances, dwindling operating funds, and difficult conversations about special assessments or increased dues.
The smartest associations won’t wait for the downturn to hit their community. They’ll prepare now.
Want the Full Picture?
This is only a snapshot of what the data is telling us. To dive deeper into leading indicators, risk factors, and proven strategies to strengthen collections before a downturn hits, read our latest whitepaper:
“The Closing Window: Why Now Could Be Your Last Chance to Stabilize Community Finances in 2026.”
Inside, we break down the numbers, the warning signs, and the proactive steps every HOA and COA should be taking now—before delinquencies accelerate.
If you need help navigating what’s ahead, or want to understand how AI-backed AR recovery can shield your community from the coming pressure, we’re here to walk with you.
