Q4 2025 Fed Data: Credit Growth Turns Positive, But Household Balance Sheets Tell a Different Story

The Federal Reserve’s latest Distribution of Financial Accounts ("DFA") release shows a return to positive consumer credit growth alongside continued expansion in household net worth. Beneath the surface, however, balance sheet behavior continues to evolve across income cohorts.

Our latest research breaks down what’s driving these trends—and what they signal for credit markets going forward.

Quick Insights

• Net worth growth remains equity-driven: Household net worth increased by $2.1 trillion in Q4-2025 and over $14 trillion for the year, with gains heavily concentrated among top income cohorts

• Consumer credit turns positive: Credit growth increased in Q4 across all cohorts, pushing YoY growth above 0 for the first time since Q3-2024, though the broader trend since 2022 remains subdued

• Lower-income households continue to de-lever: Despite macro pressures, consumer credit for the Bottom 80% remains near or below 2022 levels, reflecting a sustained shift toward balance sheet discipline and cash flow prioritization