The financial health of American households has taken a turn for the worse, with a significant portion of families now struggling to keep up with debt payments. A recent Federal Reserve survey indicates that the number of families falling behind on their loan obligations has surged to levels not seen since the aftermath of the Great Recession.
According to the Federal Reserve's Survey of Consumer Finances, released on Friday, the percentage of families behind on their financial obligations climbed from approximately 12% in the previous survey to nearly 20% for the three-year period ending in 2025. This marks the highest level recorded since 2010, a period when the nation was just beginning to recover from the global financial crisis.
A man shops for groceries at a store in Arlington, Virginia, the United States, on June 10, 2026.
Xinhua News Agency | Xinhua News Agency | Getty Images
The survey also highlighted an acceleration in families falling behind by two months or more, rising to over 8% from 5% in 2022. Furthermore, the debt-to-income ratio saw a substantial increase, with families having payment-to-income ratios greater than 40% jumping to 8.6%, up from 6.5% in 2022 and reaching the highest point since 2013.
While the overall ability to manage debt has worsened, the report indicated some narrowing of wealth disparities. However, higher earners experienced a significant boost in their net worth, with those in the top income bracket reporting a 31% increase. This occurred during a period of continued economic growth but also persistent inflation rates not seen since the early 1980s.
Despite a 7% increase in real median family income, the average income saw a 6% drop, suggesting that income gains were not evenly distributed. Families at the lower end of the income spectrum saw modest income increases, while those at the upper end experienced declines. This pattern led to a slight decrease in income inequality between the survey periods.
Notably, income gains were particularly strong for families aged 75 or older, while income for those aged 35 to 44 tumbled by 25%, attributed to a decline in capital gains for this demographic. Black non-Hispanic families, Asian families, and families in the upper income and net worth distributions also saw their median and mean incomes fall.
Overall net worth generally increased, with inflation-adjusted average net worth rising 7% to $1.24 million. However, median net worth climbed a more modest 2% to $215,900, largely due to gains at the higher end of the wealth spectrum. The report cautioned that this net worth growth was significantly slower compared to the preceding 2019-2022 period.
Educational attainment also played a significant role, with college graduates earning 1.9 times the median income of those with some college education and possessing nearly three times the median net worth. Lower-income families experienced wealth declines, while higher-income families saw increases. Families in the bottom quartile of income median net worth saw a 6% decline in wealth, and average net worth fell by 4%.
