Fed says household income, wealth, debt stress increased from 2022 to 2025

The Federal Reserve's latest Survey of Consumer Finances, covering the period from 2022 to 2025, reveals a mixed picture of income, wealth, and debt trends for US households. While incomes and wealth generally increased for most families, the gains were not evenly distributed, with more wealth flowing to the top 10% and some families experiencing financial stress.

The bottom fourth of households saw their net worth decline more than 50%, while the median wealth for Black families declined by 25%. Despite overall income gains, the wealth gains were slower compared to the volatile pandemic years, and financial stress increased for some households. Debt remained stable, but household leverage declined, but signs of debt stress emerged due to high inflation and rising interest rates.

The median debt payment as a share of income rose to 15.4%, and the total debt-to-income ratio increased to 94.9%. A larger share of families, 8.6%, now have debt payments that consume more than 40% of their income, the highest since the 2013 survey. The survey suggests a "K-shaped" distribution, where families at the bottom may be falling behind while those with existing assets are moving ahead.