Wealth Gap Widened After Pandemic: U.S. Federal Reserve Reports Lower Net Worth for Bottom 25%

[Mexico City = Shim Young-jae, Correspondent] While household income and assets in the U.S. have generally increased since the COVID-19 pandemic, the financial situation of low-income and low-asset households has worsened. The net worth of households in the bottom 25% has decreased by more than half, and the median net worth of Black households has also dropped by 25%. In contrast, households with existing wealth and older individuals have experienced relatively significant asset growth.

According to the "2025 Survey of Consumer Finances" released by the U.S. Federal Reserve (Fed) on the 9th (local time), the median real income of U.S. households is projected to increase by 7% to $82,200 from 2022 to 2025. The median real net worth is estimated to rise by 2% to $215,900.

Reuters reported, citing the Fed's survey results, that the increase in household income in the U.S. after the pandemic has been concentrated among relatively disadvantaged groups, while the benefits of asset growth have disproportionately gone to the top 10% of households.

The Fed assessed that "while most households have seen increases in income and net worth amid moderate economic growth and high inflation, the number of households experiencing financial stress appears to be increasing."

Income Increased but Assets Decreased: Low-Income and Black Households Hit Hard

The median real income of U.S. households increased by 7% from 2022 to 2025. However, the average income decreased by 6% to $145,200.

The real income of households in the bottom 60% of the income distribution increased by 4-7%. In contrast, the real income of households in the top 10% decreased by 6%.

Reuters explained that the increase in income for low-income individuals aligns with the labor shortages in the service sector that emerged after the pandemic, leading to wage increases and hiring bonuses in face-to-face service industries such as healthcare and dining.

However, the increase in income did not translate into asset accumulation.

According to the Fed survey cited by Reuters, the net worth of households in the bottom 25% decreased from $3,800 in 2022 to $1,700 in 2025, a decline of about 55%.

The median net worth of Black households also fell by 25%, contrasting with a 60% increase from 2019 to 2022.

The Fed analyzed that the survey results reaffirmed the existing structure of asset inequality based on household characteristics. Households that already possess significant assets, older individuals, and those with higher education and income have experienced greater asset growth compared to other groups. Notably, households where the primary member is over 75 years old saw a 37% increase in net worth.

Reuters reported that this intergenerational asset gap is also reflected in the delayed household formation and home purchasing among younger generations.

The overall median net worth of households increased by 7% to $1.24 million last year compared to 2022. However, the increase rate of the median net worth was only 2%. This indicates that while the average assets increased overall, there were disparities in the asset growth among households.

Nearly 20% of Households in Default: Increase in Buy Now Pay Later Usage

While the overall debt levels of households remained stable, the repayment burden has increased. According to the Fed, about 77% of U.S. households held debt last year, which is nearly the same level as in 2022.

There were no significant changes in the median and average debt balances. The leverage ratio, which is the ratio of debt to assets, actually decreased. However, the indicators showing the debt burden relative to income worsened. According to Reuters, the median ratio of debt repayment to income increased by 2 percentage points to 15.4% compared to 2022.

The ratio of total debt to income also rose from 89.4% in 2022 to 94.9% in 2025. Particularly, the proportion of households using more than 40% of their income for debt repayment increased from 6.5% to 8.6%, the highest level since the 2013 survey.

The proportion of households that reported being in default on loans also significantly increased. According to Reuters, the percentage of households that responded they were in default rose from about 12% to nearly 20%.

The proportion of households using Buy Now Pay Later (BNPL) services also increased from 7% in 2022 to 12% in 2025. Reuters analyzed that the increase in loan defaults and BNPL usage amid sustained consumer spending could provide clues to the financial pressures faced by some households.

There is also an analysis that the phenomenon of "K-shaped polarization" in the U.S. economy is emerging, where economic performance varies based on asset ownership and income levels. Households with significant existing assets or high incomes are advancing economically, while lower-income groups are stagnating or falling behind.

Decline in Stock Investment Participation: Asset Holdings of Households Increase

Changes have also been observed in the ownership status of major assets such as housing and stocks. According to the Fed, the homeownership rate among U.S. households was about 66% last year, nearly the same as in 2022.

The median net worth of households that own homes increased from $218,900 to $230,000. The net worth of homes is the amount remaining after deducting mortgage and other housing-related debts from the home value.

Participation in the stock market slightly decreased. The proportion of households holding stocks directly or indirectly fell from 58% in 2022 to 56% in 2025.

However, the median stock assets of households that own stocks increased by 36%, from $56,900 to $77,400. While the proportion of households participating in the stock market decreased, the asset size of those already holding stocks grew.

The participation rate in retirement pensions rose slightly to about 65%. Among households with account-type pensions, both the average and median pension balances increased.

The Fed assessed that the rapid asset growth observed during the pandemic has slowed down. Reuters explained that the sharp decline and rebound in the stock market during the pandemic, along with large federal government support, influenced changes in household assets.

This survey was conducted among approximately 4,300 households across the United States, with most of the survey taking place in April and May 2025.

The Fed has been conducting the Survey of Consumer Finances every three years since 1989. The survey is conducted by NORC at the University of Chicago, which extracts representative samples from 119 regions across the U.S.

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