It’s been a busy year for the economy – and if you’ve had a hard time keeping up, you’re not alone. From rising interest rates to shifting debt trends, the headlines of 2025 have impacted everything from buying a home to paying off student loans.

Let’s take a quick look at what shaped this year – and what it could mean for your financial plans ahead.

Interest rates stayed elevated (with some signs of easing)

In 2025, much of the U.S. economy continued to feel the effects of higher interest rates. While some hoped for rate cuts, inflation and other factors kept rates elevated. Unfortunately, that meant higher costs for many borrowers. That said – and depending on how the markets react – some modest easing has been hinted at, offering potential relief down the road.

Housing and borrowing stayed competitive and costly

Mortgage balances rose early in the year, as some homebuyers decided it was time to move forward despite elevated rates. But for many, borrowing stayed costly – making it harder to take on big purchases without straining their budgets.

Inflation is easing – but prices are still high

While inflation showed signs of cooling relative to its 2021–2022 peaks, many prices remain stubbornly high. For everyday families, that means groceries, energy, utilities, and other essentials still feel expensive – eating into the funds available for savings, paying down debt, or investments.

Student loans are back – and with consequences

One of the biggest financial stories of 2025 has been how student loan repayments resumed not long after pandemic-era relief ended. Millions of borrowers — many of whom had relied on the pause to stay afloat — are now facing monthly bills again.

But the impact goes deeper than just cash flow. Nearly 8–10 % of outstanding student loan debt was classified as 90-plus-days delinquent in early and mid-2025, a sharp leap from the less than 1% delinquency rate at the end of 2024. That kind of shift has led to widespread credit score drops – making it harder for borrowers to qualify for mortgages, car loans, or even credit cards.

Consumer debt rose – largely fueled by student loans

Overall household debt climbed again in early 2025, reaching roughly $18.2 trillion in the first quarter. Auto and credit card debt growth slowed – in part because rates stayed high – but student loan balances rose, driving much of the increase.

Climate and macro pressures added to cost pressures

Costs associated with climate impacts – from increased insurance premiums to rising infrastructure and disaster-related expenses – continued to ripple into household budgets. Many people are seeing higher property insurance rates, increased utility costs, or surprise home repairs.

<H2> Looking ahead – what to watch

What should you be aware of as we head into 2026?

• Will interest rates continue to ease? If central banks begin meaningful rate cuts, borrowing could get cheaper – but that will likely take time, and could come with trade-offs (like renewed inflation).
• What happens with student loan repayment and default risk? As more borrowers struggle, there could be ripple effects: higher defaults, tighter credit issuance, and tougher underwriting from lenders.
• How will climate and macroeconomic stressors shape cost of living and insurance expenses? For homeowners and renters, rising premiums and home repair costs may become a recurring concern.

2025 has been a year of high rates, rising debt, and shifting economic trends that touched nearly every aspect of personal finance. Take control of your finances by reviewing your budget, prioritizing debt, and planning for uncertainty – and reach out to us to create a personalized plan that keeps you on track in 2026 and beyond.