The incomes and net worth of most American families rose between 2022 and 2025, but more households struggle to meet their debt obligations, according to the Federal Reserve’s new Survey of Consumer Finances.
Real median income, adjusted for inflation, rose 7% to $82,200. At the same time, real median income fell 6% to $145,200. The difference is largely due to a contraction in income at the top end of the distribution. The Federal Reserve reports that incomes of poorer families have increased more significantly, while those of the highest-income groups have decreased.
The median net worth has increased by 2% to $215,900, and the median – by 7% to $1.24 million. The richest 10% have increased their median wealth by 31% to $3.6 million. However, the Federal Reserve reports significant differences between the groups.
Oldest are wealthiest, young people are losing ground
Families headed by someone aged 75 or older now have the highest median net worth among age groups. Their median has increased by 37%. For families under 35, it fell 23% to $33,000. The analysis says the decline for the youngest families is largely due to the decline in the value of business shares, which rose sharply between 2019 and 2022.
The median net worth of non-Hispanic black families fell 25%, even as their average wealth rose 5%. For Hispanic families, the median wealth increased 18%, while the average increased 34%. The Federal Reserve says the median wealth ratio of white to black families has reached its highest level since 2016.
More families are falling behind on their payments
The share of families with debt has remained largely unchanged – about 77%, and the median and average debt levels have remained the same. At the same time, debt burdens have increased. The share of families with debt payments exceeding 40% of income has increased from 6.5% to 8.6% – a level last seen in 2013. The median debt-to-income ratio has reached 15.4%.
“While most families have seen modest gains in income and net worth, a growing number appear to be experiencing financial stress“, the Federal Reserve said.Nearly 20% of families said they were behind on their mortgage payments, up from about 12% in 2022. More than 8% were at least two months late, up from 5% three years earlier. The Fed attributed the deterioration to higher mortgage and consumer interest rates amid continued inflation.
The homeownership rate has remained around 66%, but the median net worth of a home – after deducting the mortgage – has increased by increased to $230,000 from $218,900. Stock market participation fell from 58% to 56%, while the median value of shares among holders increased by 36% to $77,400. Thus, asset growth was more concentrated among families who already had investments.