District residents carry more than $100,000 in debt on average, nearly $40,000 more than the typical American. Yet for those who own homes, years of accumulated equity can provide another source of money when household budgets are strained.
That financial cushion, however, is not shared equally. Mortgages account for more than three-quarters of household debt in D.C., while residents collectively carry billions of dollars in credit card balances. Black residents are also less likely than white residents to own homes, leaving fewer with access to the equity that homeowners can tap when expenses mount.
In 2025, the average District resident with a credit score owed $102,400 in household debt, according to data from USAFacts and the Federal Reserve Bank of New York. This is $39,200 more than the average American. Still, after adjusting for inflation, District residents’ debt dropped by $3,900 from the year before.
Most of what D.C. residents owe is tied to housing. In 2025, mortgage debt made up about 76.3% of all household debt in the District.
Credit card debt is also a major burden.
According to WalletHub’s 2025 analysis, Washington households had an average of $14,565 in credit card debt, placing the District 64th out of 180 cities. Altogether, Washington households owed about $4.68 billion on their credit cards.
Americans across the country are struggling with more expensive consumer debt.
Household debt reached $18.8 trillion during the first quarter of 2026, according to the Federal Reserve Bank of New York. Mortgage balances accounted for $13.19 trillion, while credit card balances stood at $1.25 trillion. Home equity line of credit balances increased by another $12 billion to $446 billion, continuing a trend that began in 2022.
“Aggregate household debt levels rose slightly, with modest increases in most debt types offsetting a seasonal decline in credit card balances,” said Daniel Mangrum, a research economist at the New York Fed. “Delinquency transition rates were mostly steady, while student loan delinquencies are returning to pre-pandemic levels.”
However, another analysis shows that the financial strain is much greater for millions of individual borrowers than the overall numbers suggest.
The Century Foundation and Protect Borrowers estimated that approximately 111 million Americans, roughly half of all credit cardholders, cannot pay their balances in full each month. About 68 million people are considered “debt-stressed,” meaning they use at least 30% of their available credit.
More than 27 million cardholders cannot afford to pay more than the minimum due. The analysis estimated that a debt-stressed borrower making only minimum payments would spend an average of $251 a month, more than $3,000 a year, while continuing to accumulate interest on most of the remaining balance.
Black borrowers are feeling this pressure even more.
Black debt-stressed cardholders owed an average of $9,469 at the end of 2025. Their average balances had increased by 31% since 2018, faster than those of any other racial group studied. Twenty-eight percent of Black debt-stressed borrowers were making only minimum payments, while their median credit utilization had climbed to 80.8%.
The report said the disparities are connected to longstanding differences in income, wealth and access to credit. According to the analysis, the median Black household wealth is $24,520, compared with $250,400 for white households.
“The racial wealth gap is real. At the luxury senior highrise I work at there are 450 seniors who live here,” wrote social media user Alan Holmes on X, formerly known as Twitter. “There are less than 10 Black American residents. Black boomers have the most wealth… of all Black Americans but even they don’t have anywhere near the White boomer.”
Homeowner Equity
Homeowners, on the other hand, may have another way to access money.
American homeowners with mortgages held approximately $17.9 trillion in net home equity during the first quarter of 2026, with the average borrower holding about $310,500.
Increasingly, homeowners are taking out loans against their home equity.
Homeowners nationally tapped more than $77 billion through home equity loans and lines of credit during the first three months of the year. ICE Mortgage Technology found that approximately $47 billion in equity was withdrawn from mortgaged properties during the quarter.
Experts said many homeowners got their mortgages when interest rates were much lower. Instead of refinancing and losing that low rate, they can now take out a second loan using their home equity.
The D.C.-based Mortgage Bankers Association has documented the change. Applications for home equity loans and home equity lines of credit increased 7.2% in 2024, while total outstanding home equity debt increased 10.3%.
Approximately 39% of the home equity loans examined by the association were used for debt consolidation, including paying off high-interest credit card and student loan balances. Two years earlier, 25% were used for that purpose.
At the same time, the share used for home improvement projects fell from 65% in 2022 to 46%.
“With close to $35 trillion of homeowner equity in residential real estate and many homeowners locked into low-rate first mortgages, HELOCs (home equity lines of credit) and home equity loans have become the product of choice for many homeowners,” said Marina Walsh, vice president of industry analysis for the Mortgage Bankers Association.
Disparities in the District
In D.C., though, being able to use a home for financial support spotlights another gap.
The District’s homeownership rate is 23.8 percentage points below the national rate, according to an Urban Institute analysis. Black households account for about 41% of households in the city, but racial differences in homeownership remain substantial.
The Urban Institute found that the Black homeownership rate in Washington was 34%, compared with 47.5% among white households. Nationally, Black homeownership stood at 44.1%, meaning Black Washingtonians were less likely to own homes than Black households nationwide.
Experts noted that this gap affects more than just whether someone owns or rents a home.
A house that appreciates can become a source of generational wealth, collateral for borrowing or an emergency financial reserve. Someone who does not own a home has no comparable housing asset to draw from when credit card bills, medical expenses or other household costs increase.
Black households accounted for 41.3% of Washington households but held only 28.5% of the city’s primary-residence housing wealth, according to the Urban Institute analysis.
Black applicants had the highest purchase-mortgage denial rate among racial and ethnic groups examined in Washington, according to the Urban Institute’s analysis of 2022 Home Mortgage Disclosure Act data.
Black applicants were denied at a rate of 16.6%, compared with 2.8% for white applicants.
Debt was often the reason for being denied.
Among Black Washington applicants denied purchase mortgages, debt-to-income ratios were cited in 32.5% of cases, compared with 19.8% for white applicants.
Even people who seem financially ready for a mortgage can have trouble affording a home in the Washington area.
The Urban Institute identified 918,220 “mortgage-ready” consumers age 45 and younger in the Washington metropolitan area, including 164,980 Black consumers.
At a 6.9% mortgage rate, however, only 4.5% of those mortgage-ready Black consumers could afford a home in the region. Among mortgage-ready white consumers, 12% could afford one.
These affordability problems persist because mortgage rates remain high.
National mortgage rates climbed to about 6.5% in May, according to ICE Mortgage Technology, reducing buyers’ purchasing power by approximately 5% compared with February, when rates were near 6%. The monthly payment needed to purchase an average-priced home increased by $163 during that period.
ICE also found indications that less established buyers are having a harder time entering the market. By late May, the average credit score among borrowers locking in purchase mortgages had climbed above 735, while the share of mortgage locks going to first-time buyers fell to a 77-week low of 44.1%.
For current homeowners, the financial situation is quite different.
Only 1.9% of mortgaged properties nationally, about 1.09 million homes, had negative equity in early 2026, according to Cotality. That compares with 26% following the housing collapse in 2009.
Homeowners now have much more protection against falling home values than they did during the Great Recession. But the challenges today are not the same.
A homeowner might have hundreds of thousands of dollars in home equity but still struggle to pay monthly bills such as credit card bills, groceries, insurance, and utilities. Usually, that wealth can’t be used to pay these bills unless the owner sells the house or takes out a loan against it.
Renters facing the same expenses do not have home equity to draw on.
In Washington, where people already owe much more than the average American and Black households are still less likely to own homes, this difference can decide who has another financial option when money is tight.
For now, lenders expect homeowners to continue turning to their houses for cash. The Mortgage Bankers Association reported that about half of home-equity applications were closing, with an average closing time of 39 days.
“Lenders in our study expect year-over-year growth of almost 10% for HELOC debt and 7% for home equity loan debt in 2025,” Walsh said.
