US Debt Interest Costs Could Reach $2.5 Trillion by 2036, Burden Per Household Nears $17,000

Key Takeaways

• US federal interest costs are projected to reach $2.5 trillion annually by 2036, according to Congressional Budget Office estimates
• The annual debt per household burden could climb from $7,300 today to nearly $17,000 if borrowing costs remain elevated
• Rising interest rates are increasing pressure on both government finances and interest-sensitive sectors such as housing

The size of the US debt is currently the talk of the town, but the cost of carrying that debt is becoming a bigger part of the conversation. New projections suggest federal interest expenses will continue rising over the next decade. This will be driven by higher borrowing costs and growing government obligations. While the numbers are running into the trillions, one estimate shows the annual debt per household burden could approach $17,000 by 2036.

Also Read: OpenAI’s Losses Swelled to $38.5B in 2025 Despite $13B Revenue Surge

Rising Interest Costs Add Pressure to Federal Finances

The US currently owes more than $39 trillion, according to data from the US Treasury. As this balance grows, so does the amount the government spends on interest payments. Congressional Budget Office (CBO) projections show federal net interest costs accounted for 3.2% of GDP in 2025. By 2036, that figure is expected to rise to 5.3%, or roughly $2.5 trillion annually.

These costs are increasing even as federal revenue grows. The CBO estimates interest payments could make up about 30% of government revenue by 2036, compared with 19% today.

The outlook has drawn warnings from several market observers, including Bridgewater founder Ray Dalio. He said,

“I believe we are currently on the brink. We are entering a particularly risky period expected between the 2026 midterm election and the 2028 presidential election. At the same time, the monetary situation is becoming increasingly threatening.”

The figures shed light on a challenge policymakers have discussed for years. Larger debt levels become more expensive to maintain when borrowing costs remain high. This is particularly in an environment where Treasury yields stay above long-term averages.

The US debt crisis is often measured in trillions of dollars. But some analysts prefer to look at the numbers on a household basis. Current estimates place federal net interest costs at around $7,300 per household in 2025. Under existing forecasts, that amount could rise to about $15,000 by 2036. If Treasury yields remain above Congressional Budget Office assumptions, the figure could move closer to $17,000.

Also Read: Shiba Inu Exchange Activity Turns Bearish as Billions of SHIB Flow In

Housing Market Shows Signs of Cooling

The impact of higher borrowing costs is also becoming visible elsewhere in the economy. New data released this week showed US housing starts fell 15.4% in May to an annualized rate of 1.18 million units. This is the lowest level since May 2020. The figure was well below the five-year average of 1.44 million units.

Much of the decline came from multifamily construction, where starts dropped 40.2% month-over-month to 284,000 units. Single-family starts also slipped 1.9% to 882,000 units, their lowest level since September 2025.

While housing construction and federal debt are separate issues, both are being influenced by the same backdrop of elevated borrowing costs. Higher rates have made financing more expensive for homebuilders while simultaneously increasing the government’s debt-servicing burden.

Also Read: Hyperliquid Open Interest Jumps 32% in a Week as HYPE Traders Eye $80