Fed Survey: Share of U.S. Families Behind on Debt Payments Hit Nearly 20% at End of 2025, Highest Since 2010

Every three years the Federal Reserve takes a full inventory of American household finances, and the newest edition, released today, Oct. 9, covering the period through the end of 2025, shows more families struggling to keep up with what they owe.

"Families were more likely to be behind on their financial obligations than at any point since the 2010 survey," the Fed's Survey of Consumer Finances stated. That year the country was just emerging from the Great Recession, which ran from December 2007 to June 2009.

The debt numbers

The portion of families behind on loan payments at the end of 2025 rose from about 12% in the prior survey to nearly 20%. That is a gain of roughly 67%.

Families two months or more behind went from 5% in 2022 to more than 8%.

The share of families with payment-to-income ratios above 40% rose to 8.6%, up from 6.5% in 2022. That is the highest level since 2013.

Income and wealth moved differently

The Fed's income findings are not uniformly bleak. Real median family income, the midpoint, rose 7%. Average income fell 6%.

According to the report, "Families in the lower ends of the income and net worth distributions saw modest increases in median and mean income, while families in the upper ends saw declines." The Fed concluded that "income inequality decreased slightly between surveys."

The age breakdown is lopsided. Income gains were particularly strong for families aged 75 or older. Income fell 25% for families aged 35 to 44, which the Fed attributed to declines in capital gains income for that group.

Median and mean income also fell for Black non-Hispanic families, Asian families, and families toward the top of the income and net worth distributions.

Net worth generally increased. Inflation-adjusted average net worth rose 7% to $1.24 million. Median net worth rose only 2%, to $215,900, which the report tied to gains at the higher end. The report noted that net worth growth was "much slower" than in the prior report covering 2019-22.

The top income group saw its median net worth rise 31%. Families in the bottom one-fourth of income saw median net worth decline 6% and average net worth fall 4%.

The period covered also includes inflation running at rates not seen since the early 1980s, even as the economy continued to grow.

The Fed's data cuts both ways

The numbers support two readings, and both appear in the Fed's own findings. Median incomes rose, wealth gaps narrowed somewhat, and inequality in income edged down. At the same time, the share of families behind on their obligations reached its highest level since the 2010 survey, and the share spending more than 40% of income on debt payments reached its highest since 2013.

A median that rises while the average falls means the picture depends heavily on which families you look at. A rising median alongside a surge in late payments suggests that income gains for the typical family did not stop a large minority from falling behind.

Education gaps

The survey also found considerable disparities among education groups. Families with a college degree had 1.9 times the median income of those with "some college" and nearly three times the median net worth.

Federal balance sheet adds to the unease

Household stress is landing alongside concern about the government's own books. An opinion piece published by Fox News states the national debt has passed $40 trillion, a burden of roughly $117,000 for every man, woman and child in the country. It also says interest costs exceed $1 trillion a year, more than one fifth of total federal revenue.

The piece cites the Government Accountability Office, which it says describes the federal government as being on an unsustainable fiscal path. House Majority Whip Tom Emmer has discussed the national debt surpassing $40 trillion as part of the GOP's priorities ahead of the upcoming midterm elections.

Those federal figures come from a different source than the Fed's household survey, and the survey itself does not tie family delinquencies to federal borrowing.

What comes next

The survey covers the period through the end of 2025. A New York Fed survey released earlier this week found households reporting their financial situations had worsened from a year ago and said they were likely to be weaker in the year ahead.

The Fed releases the Survey of Consumer Finances every three years. Until the next edition, the open question is whether the share of families behind on payments has risen further since the end of 2025, as the New York Fed's survey of household sentiment suggests.