Americans’ debt has soared near levels not seen since the wake of the Great Recession – a cause for concern even as most families have seen their wealth increase and consumer spending has remained strong, according to federal data released Friday.
The share of American families behind on loan payments at the end of 2025 jumped from 12% in the previous period to nearly 20%, according to the Federal Reserve’s Survey of Consumer Finances, which is released every three years. Those behind on the bills by two months or more hit over 8%, up from 5% in 2022.
“Families were more likely to be behind on their financial obligations than at any point since the 2010 survey,” the report said.
It was referring to data from the tail-end of the Great Recession, an economic crisis that lasted from December 2007 to June 2009 following a mortgage collapse. At one point, the unemployment rate hit 10%.
Yet the Fed’s report – which covered the 2022 to 2025 period – also showed a slight decrease in wealth disparity, as incomes rose for most Americans as they emerged from the Covid pandemic.
Inflation-adjusted average net worth jumped 7% to $1.24 million, according to the survey. Median net worth ticked up just 2% to $215,900, weighing in larger gains among older and affluent Americans.
However, gains in net worth were “much slower” than the 2019 to 2022 period, when wealth increased 37%, the most in the survey’s 30-plus year history, the report said.
And wealth gains continued to increase at a faster pace for more affluent Americans, with median wealth for a family in the top 10% of earners jumping 31%, while it decreased for the bottom 40% of earners.
Americans 75 and older saw their wealth skyrocket 37%, while it dropped 23% for people under 35 – likely a result of older individuals benefiting from stock market gains.
That can help explain why younger Americans have reported taking longer to hit financial milestones, like buying their first house.
Tougher economic conditions have persisted. Consumer sentiment has hit its second-lowest level in history this month, according to the University of Michigan, as Americans grow frustrated with stubborn inflation.
But consumer spending has remained resilient. US household spending increased 6.1% in the 12 months through August – due partially to higher prices, but also a larger volume of purchases, according to the Department of Commerce.
Though spending has been strong, consumers are also taking on more debt. One concerning trend is that Gen Zers – facing a tight entry-level job market while also investing in stocks earlier than any prior generation – are racking up interest on their credit cards, according to a Deloitte survey.
In the 2022 to 2025 period, the median debt payment as a share of income rose 2 percentage points to 15.4%, according to the Fed survey. The total debt-to-income ratio hit 94.9%, up from 89.4% in 2022.
A worrying 8.6% of families reported debt payments worth more than 40% of their income – up from 6.5% in 2022 and the highest level since the 2013 survey.
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