A new Brookings report, the first in its “States of Affordability” series, finds that 45.5% of U.S. households did not earn enough to cover basic necessities in 2024. The figure is not a pandemic anomaly. In nearly every year since 2014, more than 40% of American households have struggled to “make ends meet,” Brookings’ term for covering housing, food, child care, health care, transportation, and utilities on post-tax income.
Three findings stand out.
- First, the post-pandemic reversal was steep. The share of households able to make ends meet fell 10 percentage points from 2022 to – 2024, erasing most of the gains built earlier in the decade as stimulus payments and expanded tax credits expired and costs climbed.
- Second, the margin is thin. Brookings estimates that raising the cost of living by just $1,000 a year, less than $100 a month, would push 3 million more households below the line. The report notes that households in that position often respond by forgoing rent, utility, or debt payments, choices that ripple directly into charge-off and recovery performance. Conversely, 37.9 million households could make ends meet with a $10-an-hour raise, and another 10 million with $500 less in monthly costs. Many consumers sit close to the threshold in both directions.
- Third, the strain is uneven. In 2024, 55% of households of color could not make ends meet, with Black and Latino or Hispanic families consistently faring worst, a pattern Brookings ties to persistent wage gaps. Affordability also varies sharply by geography, with shares above 60% in states such as Colorado and the Dakotas but below 50% in New York, California, and Kentucky, and as low as 39% in Hawaii.
One caveat sharpens the picture for this industry: Brookings’ calculations exclude student and medical debt repayment entirely, and leave no room for savings. In other words, the share of households genuinely stretched is likely understated relative to the budgets your accounts actually carry.
The takeaway for creditors and agencies is less about any single number and more about the trend. A large, persistent share of consumers is operating with no cushion, making affordability data a leading indicator worth watching alongside your own portfolio metrics.
