The Federal Reserve reported Friday that U.S. families' ability to meet debt obligations has deteriorated to levels unseen since the aftermath of the 2008 financial crisis, signaling broad financial stress across the country.
The Fed's triennial Survey of Consumer Finances found that nearly 20% of families fell behind on loan payments by the end of 2025, up sharply from about 12% in the prior 2022 survey. Families delinquent by two months or more nearly doubled to more than 8% from 5%.
The share of families carrying debt-to-income payment ratios exceeding 40% jumped to 8.6% from 6.5% in 2022, reaching the highest level since 2013. The report covered a period in which the economy continued expanding despite inflation rates not seen since the early 1980s.
The deterioration reflects uneven income patterns across the population. Real median family income increased 7%, but average income fell 6%, indicating that gains clustered at the top of the distribution. Families aged 75 or older posted strong income gains while those aged 35 to 44 saw income plunge 25%, a decline the Fed attributed to reduced capital gains.
The findings revealed persistent disparities. 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. Families with college degrees earned 1.9 times the median income of those with "some college" and held nearly three times their median net worth. Lower-income households saw median net worth decline 6%.
Higher earners pulled away: those in the top income group saw median net worth rise 31%. Inflation-adjusted average net worth climbed 7% to 1.24 million, though median net worth rose just 2% to 215,900.
A separate New York Fed survey released the same week showed households reported their financial situations had worsened from a year earlier and expected further deterioration ahead.