According to the New York Federal Reserve's report, US household debt has risen by $167 billion in Q1 2025, reaching a record total of $18.2 trillion.
Record Debt Growth
Overall household debt has increased by $7 trillion compared to ten years ago. The sharp rise is primarily due to mortgage debt, which climbed by $199 billion to $12.8 trillion. At the same time, student loan balances rose by $16 billion to $1.6 trillion. Meanwhile, auto loan debt fell by $13 billion to $1.6 trillion, and credit card balances decreased by $29 billion to $1.2 trillion.
Mortgage Pressure and Housing Prices
The current housing distress began during the pandemic when mortgage rates hit historic lows, leading buyers to rush into the market. As of March 2025, home prices increased by 39% since March 2019, according to the S&P CoreLogic Case-Shiller Index. While more homes are finally coming onto the market, the supply is primarily focused on higher price brackets, leaving affordable options scarce.
Inequality Among Homebuyers
A report by the National Association of Realtors indicates that households earning between $75,000 and $100,000 have only seen a small improvement in available affordable homes. Meanwhile, a household earning $50,000 can afford just 8.7% of homes for sale. In contrast, buyers making $250,000 or more can access at least 80% of the market. Inequality in housing availability has deepened compared to 2019, and strategic actions are necessary to address this imbalance.
The report highlights a growing debt burden for US households and an urgent need for intervention in the housing market to improve accessibility and equity.
