The Federal Reserve reported Friday that American families fell behind on debt payments at the highest rate since the aftermath of the Great Recession, signaling renewed financial stress across households.
The Fed's Survey of Consumer Finances, released every three years, found that nearly 20% of families were behind on loan payments at the end of 2025, up from about 12% in the prior survey. Families behind by two months or more jumped to more than 8% from 5% in 2022. The survey covers the period through 2025, when inflation remained elevated relative to historical norms, though the broader U.S. economy continued to grow.
The share of families with debt-to-income payment ratios exceeding 40% reached 8.6%, up from 6.5% in 2022 and marking the highest level since 2013.
Income patterns reveal widening inequality despite a modest overall gain in median family income. Real median family income rose 7%, but average income fell 6%. Families aged 75 or older saw particularly strong income gains, while those aged 35 to 44 experienced a 25% decline, attributed largely to falling capital gains. Black non-Hispanic families, Asian families, and those at the upper end of income and wealth distributions all saw median and mean income decline.
College-educated households maintained substantial advantages. Those with a degree earned 1.9 times the median income of families with some college education and nearly three times the median net worth. Lower-income families saw wealth decline, with those in the bottom quarter of income experiencing a 6% drop in median net worth.
Wealth gains concentrated at the top. Inflation-adjusted average net worth rose 7% to 1.24 million dollars, but median net worth climbed just 2% to 215,900 dollars. Higher earners in the top income group saw median net worth jump 31%. Median net worth growth slowed considerably compared to the prior survey period covering 2019 to 2022.
A separate New York Fed survey released earlier in the week showed households reporting deteriorated financial situations and expecting further weakness ahead. The convergence of elevated debt delinquencies, declining payment capacity for many families, and persistent concerns about future finances underscores stress building within the consumer sector.