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

By Howard Schneider

WASHINGTON, Oct 9 (Reuters) – The exit from the COVID-19 pandemic raised incomes and wealth for most US households, with income gains concentrated among the less well off, but a ​growing share of households was stressed by rising debt during ‌a period of high inflation, a Federal Reserve survey of consumer finances from 2022 to 2025 showed.

“Against this backdrop of moderate economic expansion and elevated inflation … while most families experienced moderate increases in income and net worth, an increasing subset of families ‌appear ​to have been experiencing financial stress,” with the ⁠share of families having ⁠debt payment-to-income ratios of 40% or more rising from 6.5% to 8.6%, a level not seen since 2013, the Fed said on Friday in its latest triennial survey.

Median family income adjusted for inflation rose ​7% to $82,200 during the period, when the tight labor market of the pandemic gradually gave way to a small rise in unemployment. Households ⁠at the lower end of the income ⁠distribution saw the largest gains, consistent with conditions in ​the post-pandemic era, when firms were short of workers, particularly in the services ​sector, and employers offered pay hikes and bonuses to attract ‌and retain employees.

Real median net worth rose 2% to $215,900, and “most families across the net worth and income distributions experienced increases,” the Fed said in a press release accompanying the document.

The homeownership rate remained stable at about ⁠66%, while participation in the stock market dropped slightly from 58% in 2022 to 56% in 2025.

The survey covered a national sample of 4,367 households and ⁠was conducted mostly ‌from April through December 2025.

The slight narrowing of income ⁠inequality and overall broad wealth gains occurred while net ​worth ‌for Black families and the less well off declined. ​Families in ⁠the bottom quartile of wealth saw their net worth drop from $3,800 to $1,700, while “Black non-Hispanic families experienced a large decline in median net worth” of 25%, even though their average net worth rose about 5%. That trend reversed a pattern of gains seen since 2013, the Fed said.

(Reporting by Howard Schneider; Editing ​by Paul Simao)