The Federal Reserve’s 2022 consumer finance survey unveils a striking picture of American prosperity. The mean net worth of the average household has ascended to $1.06 million, up 23% from $868,000 in 2019. This statistic, while impressive, masks a more nuanced and unequal economic landscape.
Despite American households’ seemingly thriving financial status, the reality is more complex, particularly for the middle class. Between 2019 and 2022, real median family income modestly grew by 3%, while real mean family income saw a more significant 15% increase. These gains were predominantly enjoyed by the higher income brackets, amplifying existing income inequalities.
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The period witnessed a 37% surge in real median net worth and a 23% rise in real mean net worth, marking the largest three-year increase in the modern Survey of Consumer Finances history. Yet, this aggregate growth masks the unequal distribution of wealth gains. Homeownership, often a key component of net worth, rose slightly to 66.1%, with the median net housing value jumping from $139,100 in 2019 to $201,000 in 2022. The growth in housing values contributed significantly to net worth increases and exacerbated housing affordability issues, as median home values soared to more than 4.6 times the median family income.
Inequality is further highlighted in retirement plan participation and stock market investments. While over two-thirds of working-age families participated in retirement plans, the increases in account balances were mainly seen in families in the upper half of the income distribution. Similarly, stock market participation grew across all income groups, but the gains were substantially higher for those between the 50th and 90th percentiles.
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The top 1% of American households hold 30% of U.S. wealth – a massive $44.6 trillion.
Wealth inequality becomes starkly evident when comparing asset distribution across income quintiles. The top 20% of income earners in the United States held approximately 71% of the nation’s wealth, while the bottom 50% of earners owned only about 2.5% of total U.S. wealth as of early 2024.