Texas Border Business
Recent data from the Census Bureau indicates that US real median household income reached $87,460 last year. It’s a record high dating back to when the series began in 1967. The fact that it’s “real” means that it is adjusted for inflation, and the “median” describes the level at which half fall above and half below. Clearly, it’s nice to see some progress in this overall measure, but there are notable caveats that should be examined.
Median income rose by 3.0% for White households and 4.8% for Black households, with no significant change for Asian or Hispanic households. Full-time working women saw a 3.2% increase, while for men the level was stable.
Poverty data is also somewhat encouraging from an overall perspective. In 2025, the official poverty rate fell 0.5 percentage points to 10.2% (though there were still 34.5 million people affected). The official rates for children and Hispanic individuals both reached historic lows.
Even with better levels in overall measures, many families are struggling. In fact, the incomes of the highest 10% of households increased, while those of the lowest 10% did not. Moreover, the inflation adjustment of necessity relies on averages and aggregate assumptions. Individual households, however, often face notably different situations, particularly in costs such as housing, healthcare, and childcare. The 2025 values also do not capture any of the recent surge in energy and other prices.
Housing affordability is a widespread problem. In addition to higher costs of houses, mortgage interest rates have also risen. In many areas, insurance now costs substantially more, property taxes are up, and maintenance and repairs are expensive (and made worse by steep tariffs on building materials and construction labor shortages). While some locked in low interest rates a few years back, anyone looking to buy (or rent) in the current environment will face higher outlays.
Another significant issue area is childcare. More than half of parents who used paid childcare spent at least 50% as much on childcare as on housing, according to an assessment by the Federal Reserve. In many areas, it is also difficult to find quality options.
Healthcare also changes the dynamic, too. A significant proportion of the population does not have health insurance (and the rate in Texas is by far the highest in the US), and needed care may cause financial strains. Even for those with coverage, premiums, deductibles, and other costs are escalating. A medical issue can dramatically change financial stability, and such situations aren’t visible in aggregate numbers.
The bottom line is that high costs in particular aspects of life are causing financial difficulties for millions of individuals and families. Affordability is a pressing concern, even as median income levels are modestly rising. Stay safe!
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Dr. M. Ray Perryman is President and Chief Executive Officer of The Perryman Group (www.perrymangroup.com), which has served the needs of more than 3,000 clients over the past four decades
