The typical American household now boasts a net worth exceeding $1 million, as reported by the latest data from the Federal Reserve, signifying a significant achievement in national wealth.
Driven by a surge in the stock market, an increase in private assets, and the rise of AI-driven industries, along with a resilient yet cooling housing market, the overall household wealth in America continues to rise — despite the persistent issue of inequality.
As per a report from Sherwood News, referencing the Federal Reserve’s statistics, US households collectively possessed $167 trillion in wealth by the conclusion of the second quarter.
With approximately 132 million households across the nation, this equates to an average net worth surpassing $1 million per family — a figure that has recently gained traction on social media.
However, if the average household is now classified as a millionaire, why does it not seem that way for the majority of Americans?
One explanation is that economic confidence remains below the levels observed prior to the pandemic, as indicated by the report, which cites the University of Michigan’s consumer sentiment survey.
The survey revealed that families in the lower two-thirds of the income distribution report particularly low levels of confidence, even more so than during the financial crisis of 2008.
Concentration of Wealth
Wealth in the United States is significantly concentrated among the affluent.
According to the Bloomberg Billionaires Index, fourteen of the fifteen wealthiest individuals globally are American, which has driven the nation’s average wealth to unprecedented heights.
Data from the Federal Reserve indicates that the top 1% now controls $52 trillion, nearly one-third of the total wealth in the US, which is roughly equivalent to the combined wealth of the bottom 90% (approximately $54 trillion), a situation exacerbated by soaring stock and housing markets over the decades.
Mean averages can be deceptive when extreme outliers, such as Elon Musk, are factored in.
A more accurate representation is provided by the median: the “middle” American household.
Federal Reserve data from 2022 estimated the median household wealth at $193,000, likely slightly higher today, suggesting that the average US household is worth closer to $200,000.
For families with lower wealth, the majority of their assets are invested in home equity. Although this equity appreciates in value, it remains illiquid, which means it does not necessarily provide the sensation of newly acquired wealth.
