Household Costs Outpace Income Growth

- Total U.S. household debt reached $18.78 trillion in the fourth quarter of 2025, an increase of $191 billion from the previous quarter. This rise was primarily driven by increases in mortgage balances. - The average unsecured credit card balance for individuals seeking credit counseling was about $33,000 in 2025, remaining consistent with 2024 levels. However, credit card balances nationwide increased by $44 billion in the fourth quarter of 2025, reaching a total of $1.28 trillion. - In response to rising costs, 67% of consumers reported eating at home more often, 57% are more actively shopping for sales, and 55% are purchasing fewer non-essential products. - By the end of 2025, 32% of Americans reported that their household income was falling behind their expenses, an increase from 24% in March of the same year. - The cost of owning and maintaining a home, including expenses like property taxes, insurance, and utilities, rose to an average of $21,000 per year in 2025. This has led to an increasing number of homeowners, even those with significant equity, being classified as "cost-burdened," meaning they spend over 30% of their income on housing. - Delinquency rates for credit cards climbed to their highest levels in nearly a decade by the end of 2025. Overall, 4.8% of outstanding household debt was in some stage of delinquency at the end of December 2025. - The financial strain is not evenly distributed; 34% of households with an income below $25,000 were unable to pay all their bills in full in late 2024, compared to just 7% of households with incomes over $100,000. - The challenges for households are expected to continue, with the National Foundation for Credit Counseling forecasting sustained pressure on budgets due to the constraints on disposable income after covering basic necessities.