The share of U.S. families spending more than 40% of their income on debt payments rose to 8.6% in 2025 from 6.5% in 2022, the highest level since the 2010 survey, according to new Federal Reserve data released Friday, October 9.
The increase of 2.1 percentage points, equivalent to a 32.3% relative rise calculated by Investozora, shows that financial pressure intensified among heavily indebted families despite broader gains in household income and wealth.
The findings come from the Federal Reserve’s 2025 Survey of Consumer Finances, published at 10:00 a.m. Eastern time. The triennial survey examines household assets, liabilities, borrowing and financial conditions across the United States.
Debt Payments Rise Even as Borrowing Remains Stable
The deterioration was not primarily reflected in the number of families carrying debt. According to the Federal Reserve’s October 9 release, approximately 77% of families held some form of debt in 2025, broadly unchanged from 2022. Median and average outstanding debt also remained approximately stable in inflation-adjusted terms.
Instead, the more important divergence appeared in the relationship between debt obligations and income. The median debt payment-to-income ratio among families with debt increased from 13.4% in 2022 to 15.4% in 2025, while the aggregate debt-to-income ratio rose from 89.4% to 94.9%.
At the same time, the median leverage ratio among debtors declined from 29.2% to 26.9%, indicating that debt became smaller relative to asset values even as payments consumed a larger share of income.
The Federal Reserve’s report identified higher borrowing rates and changes in income as possible contributors to the increased financial burden. Rising asset values, including housing and stocks, also helped explain why leverage measures improved while debt-servicing pressure worsened.
Late Loan Payments Jump to 19.6%
A second indication of financial stress emerged in the survey’s credit-market findings. The proportion of families reporting late loan payments within the preceding year increased from 12.2% in 2022 to 19.6% in 2025, a rise of 7.4 percentage points.
More serious payment delays also increased. The proportion reporting payments at least 60 days late climbed from 4.9% to 8.2%, according to Table 5 of the Federal Reserve’s financial vulnerability analysis.
Investozora calculates that the proportion reporting any late payments increased approximately 60.7% relative to its 2022 level, substantially faster than the rise in the share of families carrying debt. These findings indicate that debt repayment difficulties became more widespread, rather than merely reflecting an increase in borrowing participation.
Family Income and Wealth Still Increased
The rise in financial stress contrasted with improvements in overall family finances. Real median family income increased 7% between survey rounds to $82,200, based on income received in 2024. Real median net worth rose 2% to $215,900.
However, the gains were not uniform. Families with fewer assets generally experienced weaker wealth outcomes, while those with substantial existing assets benefited more from increases in asset prices.
This distinction matters because higher net worth does not necessarily provide immediate cash to cover monthly obligations. The results also provide context for Investozora’s earlier coverage of higher interest rates and household borrowing costs and the effect of Federal Reserve policy on consumer finances.
What the Survey Means for the U.S. Economy
The 2025 findings suggest that household financial resilience has become more uneven, with income and asset gains coexisting alongside greater repayment difficulties.
The survey is a comparison of independently sampled families across three-year intervals, not a monthly indicator or evidence that every family experienced worsening finances. Its debt burden measures also differ from the Federal Reserve’s aggregate household debt-service statistics.
The next quarterly household debt and credit data from the Federal Reserve Bank of New York will provide a more recent view of borrowing balances and delinquency trends, although the two surveys use different definitions and cannot be directly substituted.
Until then, the latest Survey of Consumer Finances establishes a central finding: American families collectively became wealthier, but a growing share faced substantial difficulty managing debt payments relative to income.
