How Bad is Inflation for Washington, D.C. Residents?

Northwestern Mutual’s 2025 Planning & Progress Study reports:

· Inflation is the #1 concern, and is outpacing household income

· More than half say homeownership is out of reach for them

· Majority already seeing everyday costs rising, like groceries and utilities

· Just under half feel financially secure

· Just over half feel the American Dream is alive and well

Washington, D.C., March 13, 2025 – Inflation continues to sting in Washington, D.C., with significant numbers of local adults surveyed saying elevated prices are having a large impact on their finances. Meanwhile, among people who don’t own a home, the majority say homeownership will never be affordable – not now, not ever.

These are among the topline findings from Northwestern Mutual’s newly released 2025 Planning & Progress Study, the company’s proprietary research series that explores the attitudes of people in Washington, D.C. and across the country – their attitudes, behaviors and perspectives across a broad set of issues impacting their long-term financial security.

The study finds that 53% of adults in Washington, D.C. believe inflation will increase in 2025. This is slightly more pessimistic assessment than adults nationally (51%). Furthermore, 60% of Washington, D.C. adults say inflation is one of the three dominant concerns that could impact their finances this year, including taxes and housing costs at 42% and 31%, respectively. Well more than half (56%) rank inflation as the #1 obstacle to achieving financial security.

At the same time, exactly half of those in Washington, D.C. believe their household income is growing slower than inflation. That’s more than four times greater than the 11% who say their income is growing faster than inflation, while 29% believe their income is on pace with inflation.

Feeling the sting

Inflation is hitting people locally everywhere – from the grocery aisle, to the gas pump, to their childcare expenses and more.

A large majority (84%) in Washington, D.C. say they have experienced elevated grocery costs in the last three months, matching the national average. Nearly seven in ten (69%) experienced elevated utility costs, while 53% experienced elevated gas costs, 58% experienced elevated housing expenses and 17% experienced elevated childcare expenses.

Not surprisingly, just under half (48%) Washington, D.C. adults indicate they feel financially secure. Meanwhile, just over a fourth (26%) say they do not feel financially secure. And exactly half of adults consider themselves to be “disciplined planners.”

“Financial insecurity continues to be an epidemic, particularly here in Washington, D.C. where the financial landscape seems to be changing daily,” said Kurt Rupprecht, partner and private wealth advisor at Northwestern Mutual’s K Street Financial. “It’s no surprise that many people are struggling, even those whose incomes have been above average. The question is what can be done about it, and it’s an individual decision. In my estimation, there is no better time than right now for people to take control of their money habits and financial plans.”

Credit cards are top source of debt

Across all D.C. residents surveyed, the primary source of non-mortgage debt by far is credit cards (32%), accounting for more than double the #2 source (car loans, 14%) and four times the #3 source (medical debt, 8%). The study also found that 64% of adults in Washington, D.C. say they prioritize paying down debt versus 36% who prioritize saving.

Among those in Washington, D.C. who carry personal debt, 43% owe less than $5,000, exclusive of mortgages.

Home ownership feels out of reach for many

Among Washington, D.C. residents who are not currently homeowners, over half (54%) say that owning a home will never be financially affordable – now or in the future.

Slightly more than half of Washington, D.C. adults (51%) believe the American Dream is alive and well, and 47% believe it is attainable for most Americans. People are more optimistic about their personal situations, with 70% considering the American Dream attainable for themselves.

But there is some evidence the vision of the American Dream is shifting. While more than three-quarters of local adults (77%) say that home ownership is essential for building wealth, three in five (64%) believe it is possible to achieve financial security without owning a home.

“Today, people in D.C. are redefining the American Dream and finding new ways to achieve it,” said Rupprecht. “For some, the path to building long-term wealth may depend more on the stock market than the housing market. Keep in mind that you don’t have to go it alone. A financial advisor can be a great help, helping you build a personalized roadmap of your own to financial security.”

About The 2025 Northwestern Mutual Planning & Progress Study

The 2025 Planning & Progress Study was conducted by The Harris Poll on behalf of Northwestern Mutual among 4,626 U.S. adults aged 18 or older. The survey was conducted online between January 2 and January 19, 2025. Data are weighted where necessary by age, gender, race/ethnicity, region, education, marital status, household size, household income, and propensity to be online to bring them in line with their actual proportions in the population. A complete survey methodology is available.

About Northwestern Mutual

Northwestern Mutual has been helping people and businesses achieve financial security for more than 165 years. Through a comprehensive planning approach, Northwestern Mutual combines the expertise of its financial professionals with a personalized digital experience and industry-leading products to help its clients plan for what's most important. With nearly $700 billion of total assetsi being managed across the company’s institutional portfolio as well as retail investment client portfolios, more than $38 billion in revenues, and $2.4 trillion worth of life insurance protection in force, Northwestern Mutual delivers financial security to more than five million people with life, disability income and long-term care insurance, annuities, and brokerage and advisory services. Northwestern Mutual ranked 110 on the 2024 FORTUNE 500 and was recognized by FORTUNE® as one of the "World's Most Admired" life insurance companies in 2025.

Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company (NM), Milwaukee, WI (life and disability insurance, annuities, and life insurance with long-term care benefits) and its subsidiaries. Subsidiaries include Northwestern Mutual Investment Services, LLC (NMIS) (investment brokerage services), broker-dealer, registered investment adviser, member FINRA and SIPC; the Northwestern Mutual Wealth Management Company® (NMWMC) (investment advisory and services), federal savings bank; and Northwestern Long Term Care Insurance Company (NLTC) (long-term care insurance). Not all Northwestern Mutual representatives are advisors. Only those representatives with "Advisor" in their title or who otherwise disclose their status as an advisor of NMWMC are credentialed as NMWMC representatives to provide investment advisory services.

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[1] Includes investments and separate account assets of Northwestern Mutual as well as retail investment client assets held or managed by Northwestern Mutual.