The Federal Reserve's latest Survey of Consumer Finances reveals a sharp deterioration in American households' ability to service debt, with delinquency rates reaching levels unseen since the aftermath of the 2008 financial crisis.
The share of families behind on loan payments surged to nearly 20% at the end of 2025, up from about 12% in the prior 2022 survey. Those delinquent by two months or more jumped to more than 8% from 5%. The Fed, which releases this survey every three years, stated that "families were more likely to be behind on their financial obligations than at any point since the 2010 survey."
Debt-to-income stress also climbed. Families with payment-to-income ratios exceeding 40% reached 8.6%, the highest level since 2013 and up from 6.5% in 2022. These metrics come as the economy continued to grow but inflation remained elevated compared to historical norms.
Income gains masked underlying fragility. Real median family income rose 7%, but average income dropped 6%, signaling unequal distribution. Families aged 75 and older posted strong income gains while those aged 35 to 44 saw income fall 25%, attributed to declines in capital gains. Black non-Hispanic families, Asian families, and those at the top of the income and net worth distributions all experienced falling median and mean income.
Net worth growth slowed considerably. Inflation-adjusted average net worth rose 7% to $1.24 million, but median net worth climbed just 2% to $215,900. Those at the bottom one-fourth of the income distribution saw median net worth decline 6%. Meanwhile, top earners posted a 31% increase in median net worth, widening disparities despite the Fed's finding that income inequality "decreased slightly."
Education gaps persisted. College-educated households earned 1.9 times the median income of those with "some college" and held nearly three times the median net worth.
A separate New York Fed survey released this week found households reported worsening financial situations and expected conditions to deteriorate further over the next year. The timing underscores sustained stress on household finances beyond the headline delinquency data.