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Every year, Ilyce and Sam offer their readers New Year’s resolutions for home buyers, home sellers and their personal finances. To move forward with their 2026 personal finance resolutions, we must first go back.

At the end of 2024, we asked our readers whether we were experiencing economic hardship or prosperity. A year later, the answer has become clearer: Americans are living through a deepening affordability crisis that touches nearly every aspect of their financial lives.

The year that was: 2025 in review

While headline economic indicators showed mixed signals throughout 2025, the lived experience of most Americans told a starker story. Inflation for the past 12 months, as of Dec. 18, 2025, was at 2.7%, down from 3% in September, but still above the Federal Reserve’s 2% target. Because of the government shutdown, there’s some discussion over whether that number is even accurate. Some economists pointed out that the calculations assumed zero housing inflation, typically one of the biggest line items in a household budget. Even so, the slight improvement in inflation masked a more troubling reality: Years of cumulative price increases have fundamentally reset what Americans can afford.

The housing crisis reached new heights in 2025. According to Redfin’s year-end analysis, the median home price hit an all-time high of $446,000 in June 2025. Nearly 75% of U.S. households cannot afford a median-priced home, according to the National Association of Home Builders. In their end of year insights blog, the Atlanta Federal Reserve reported that owning a median-priced home now consumes a staggering 47.7% of the median household’s income, far above the traditional 30% affordability threshold. The median age of a first-time homebuyer has surged to 40 years old — up from 33 just five years ago, according to the National Association of Realtors, although the New York Federal Reserve’s Consumer Credit Panel data shows the average first-time buyer age was 36.3 in 2024, not 40 — still a big jump.

Financial insecurity intensified across all income levels. Bank of America’s analysis found that nearly 24% of American households lived paycheck-to-paycheck in 2025, spending over 95% of their income on necessities like housing, food and utilities. Among lower-income households, that figure jumped to 29%. Multiple surveys put the overall number even higher, with some finding that 60-67% of Americans reported living paycheck-to-paycheck when using broader definitions.

The job market showed concerning signs of weakness as 2025 wore on. The unemployment rate climbed to 4.6% in November 2025, up from 4.2% a year earlier. The U-6 unemployment rate, which is the most complete measure of unemployment, was 8.7% in November, up from 8.1% in September, and stands at the highest point since 2021. Black unemployment was at 8.3%, the highest among all racial groups and also the highest since 2021. Even more troubling is the rise in long-term unemployment: 25.7% of unemployed Americans had been jobless for 27 weeks or longer by August 2025, also the highest level since the COVID-19 pandemic.

Credit card debt reached unprecedented levels. Total U.S. credit card debt hit $1.233 trillion in the third quarter of 2025, with the average American carrying $7,886 in credit card debt. With interest rates averaging over 20%, consumers faced crushing borrowing costs. Nearly half of credit cardholders carry balances from month-to-month, and about 22% of those with credit card debt said they don’t think they’ll ever pay it off.

The threat of financial crime also intensified. Globally, cybercrime damage was projected to reach $10.5 trillion in 2025. The FBI reported that total cybercrime losses hit $16.6 billion in 2024, up from $12.5 billion in 2023, with 859,532 complaints. The top crimes by complaint volume were phishing/spoofing, extortion and personal data breaches. More than 38% of s mall businesses reported raising prices to cover costs from cyber incidents, creating what experts called a “hidden cyber tax” that fuels inflation.

According to Cotality’s National Mortgage Application Fraud Risk Index, mortgage fraud risk increased 8.2% year-over-year in Q3 2025. An estimated 1 in 118 mortgage applications (0.85%) showed indications of fraud, compared to 1 in 123 applications in Q2 2024. On the other hand, property value fraud alerts surged 400% year-over-year as home prices declined across much of the U.S., creating more opportunities for fraud. And, undisclosed real estate debt fraud rose 9.1% year-over-year.

The bottom line: artificial intelligence is making it easier than ever to commit fraud, and there are fewer law enforcement resources available to stop it. It’s never been more important to take steps to protect yourself online and in the real world.

Next week, we’ll share those 2026 personal finance resolutions.

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(Ilyce Glink is the author of “100 Questions Every First-Time Home Buyer Should Ask (4th Edition).” She writes the Love, Money + Real Estate Newsletter, available at Glink.Substack.com. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact Ilyce and Sam through her website, ThinkGlink.com.)

©2026 Ilyce R. Glink and Samuel J. Tamkin. Distributed by Tribune Content Agency, LLC.