Debt Service Ratio - Historical Chart
Household Debt Service Payments as a Percent of Disposable Personal Income. Gray shaded areas indicate U.S. recessions.
Source: Federal Reserve Bank of St. Louis (FRED), Series TDSP. Shaded areas = NBER recession dates. Updated 2026-03-10.
What the Q3 2025 Data Shows
At 11.26%, the debt service ratio in Q3 2025 is above the 10-year average of 11.08% by 0.18pp. The reading has been mixed recently, fluctuating without a clear directional trend over the past 4 quarters.
The household debt service ratio (FRED series TDSP) estimates aggregate required mortgage and consumer debt payments as a share of disposable personal income. It is published quarterly by the Federal Reserve Board and is one of the primary metrics used to assess household financial health.
The ratio peaked at roughly 13.2% in Q3 2007, just before the financial crisis. It fell to historic lows around 9.2% during the pandemic era of low rates and stimulus income. As rates have risen, the ratio has begun climbing again as new borrowing occurs at higher costs.
The ratio is calculated using aggregate data, so it does not reflect distributional differences. Some households are debt-free while others are severely debt-burdened.
What This Metric Measures
This page tracks the ratio of aggregate household debt service payments (principal + interest) on mortgage and consumer debt to aggregate after-tax personal income, published by the Federal Reserve Board. The data comes from the Federal Reserve Bank of St. Louis FRED database, series TDSP, updated quarterly.
Historical Context
The all-time peak was 15.85% in Q4 2007 — roughly 1.4x the current level. The all-time trough was 9.05% in Q1 2021. During COVID-19 in 2020, the reading hit 11.59% (Q1 2020). Year-over-year, the metric has moved 1.1%.
Why It Matters
For business owners, the debt service ratio is a direct measure of your customers' capacity to spend. Every dollar going to mortgage and loan payments is a dollar not available for your products and services. When the ratio rises toward 12-13%, consumer spending growth slows measurably. When it falls below 10%, consumers have more room to spend, which supports small business revenue.
What This Means for Business Owners
Understanding where this metric stands relative to historical norms helps business owners make better borrowing decisions. Metrics far from their 10-year average often signal turning points that affect the cost and availability of credit.
Household Debt Service Ratio - Frequently Asked Questions
The household DSR is 11.26% as of Q3 2025, per FRED series TDSP. This means 11.26% of aggregate after-tax income goes to required mortgage and consumer debt payments (principal and interest).
The ratio has been increasing from pandemic-era lows as interest rates rose. New mortgages and auto loans originated at higher rates push the ratio up. However, many existing homeowners locked in low rates during 2020-2021, which caps the pace of increase.
Historically, ratios above 12.5-13% have preceded financial stress. The pre-crisis peak of 13.2% was followed by a wave of mortgage defaults. Below 10% is generally considered healthy. The current level of 11.26% needs to be interpreted in the context of rate trends.
The DSR covers only mortgage and consumer debt payments. The broader financial obligations ratio (FRED: FODSP) adds rent, auto leases, homeowner insurance, and property taxes. The FOR gives a more complete picture of household fixed costs.
Three factors combined: the Fed slashed rates to near zero (lowering debt payments), stimulus checks boosted income (raising the denominator), and forbearance programs let borrowers skip payments. All three effects have since reversed.
FRED series TDSP, published by the Federal Reserve Board. Quarterly, seasonally adjusted. Based on aggregate data from the Financial Accounts and the National Income and Product Accounts.