delinquency

The consequences of America’s affordability crisis are seen in “rising foreclosures and delinquency, especially for low- and middle-income households,” McCargo said.

Nearly two dozen chains and large restaurant-operating groups have filed for bankruptcy this year, according to BankruptcyData.com, which analyzed delinquencies from public companies and those with large liabilities.

Growing stress among lower-income households manifests in rising delinquency rates, shrinking buffers, and reductions in discretionary spending, which then hurt businesses that depend on widespread demand rather than high-margin customers.

Some have flagged signs of stress materializing among low-income consumers even as banks’ widely tracked credit measures, such as delinquencies, net charge-offs, and provisions for loan losses, are in good shape.

“Everything we’re coming across from the banks and the earnings reports and the delinquencies suggests that credit quality is still quite strong,” Clark says.