Fed Report: U.S. Households' Economic Well-Being in 2024 Hits a Seven-Year Low

💡 U.S. households' economic well-being in 2024 is expected to hit a seven-year low, according to the Federal Reserve's report.

The Federal Reserve's report on the economic well-being of U.S. households in 2024 has delivered a stark warning about the state of the American economy. The report, released in May 2025, reveals that U.S. households' economic well-being is expected to hit a seven-year low, driven by rising housing costs and stagnant wages.

The report highlights that the housing market has become increasingly unaffordable for many Americans, with median home prices rising by 15% in the past year. This has led to a sharp decline in homeownership rates, with only 65% of households now owning their own homes. The report warns that this trend is likely to continue, with millennials and Gen Z households being particularly affected.

The Federal Reserve has signaled that it will continue to prioritize inflation targeting, with Fed Chair Jerome Powell stating that the central bank needs "greater confidence" that inflation is sustainably declining before it will consider easing policy. This has led to a sharp rise in long-term interest rates, with the 10-year Treasury yield reaching 4.8% in the aftermath.

The report also highlights that the labour market is showing signs of slowing, with job growth slowing to 2% in the past quarter. This has led to a decline in consumer confidence, with only 30% of households now feeling confident about their financial prospects.

Housing Market Slows

The housing market is expected to slow significantly in the coming year, with new home sales falling by 20%. This is driven by rising mortgage rates and declining house prices. The report warns that this trend is likely to have a ripple effect on the broader economy, with construction employment falling by 10% in the past year.

Labour Market Slows

The labour market is also showing signs of slowing, with job growth slowing to 2% in the past quarter. This is driven by a decline in business investment and a rise in labour costs. The report warns that this trend is likely to continue, with unemployment rates rising to 5% in the coming year.

What It Means for Investors