Household Debt Hits Record Highs as Housing Costs Squeeze Budgets in 2026
Event summary
- Average unsecured debt among MMI clients rose 5% in 2025 to $32,600, with December hitting a record $33,000.
- Housing costs surged 10% YoY, with homeowners facing an 11% increase and renters an 8% rise.
- Credit counseling demand grew for the fourth straight year, with Gen Z clients up 37% YoY.
- Referrals to MMI from ChatGPT increased sixfold in 2025, reflecting AI's role in debt management.
The big picture
The data underscores persistent financial pressure on households, with record debt levels and housing costs creating a structural affordability crisis. The trend reflects broader national concerns about debt management and housing affordability, particularly as younger generations seek financial guidance earlier than previous cohorts. The integration of AI tools like ChatGPT in debt counseling highlights a growing digital transformation in financial services.
What we're watching
- Debt Sustainability
- Whether rising incomes can outpace expense growth to alleviate household financial strain.
- AI Integration
- The pace at which generative AI tools like ChatGPT will reshape consumer debt management strategies.
- Generational Shifts
- How earlier intervention by younger generations may impact long-term debt trends.
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