The median net worth of U.S. households has increased $24,000, or 17.6%, to $127,000 in 2019 from $103,000 in 2016, according to the Distribution of Wealth in America Since 2016 report from the Mortgage Bankers Association’s (MBA) Research Institute for Housing America (RIHA). The $127,000 median net worth for households is the highest amount observed since 2007.
“After nearly a decade of rising inequality during the Great Recession and its aftermath, the distribution of wealth in the United States became somewhat more equal between 2016 and 2019,” says Dr. John Weicher, author of the report and the director for the Center for Housing and Financial Markets at the Hudson Institute. “Americans became richer, with middle-class households on the receiving end of a bigger slice of the wealth gains. The increase in homeownership, and the steady rise in home values and the stock market, drove the increase in middle-class wealth. The median net worth of every racial and ethnic category also increased, with the largest increases coming from Black and Hispanic households.”
The RIHA report contains the same framework as its 2020 report, The Distribution of Wealth Since the Great Recession, and used data from the Federal Reserve Board’s triennial Survey of Consumer Finances to study the distribution of household wealth, its main components, and how the evolution of household wealth has affected poor, rich, and middle-wealth households. The report classifies the top 10% of households as rich and the bottom 30% as poor. In addition to examining household wealth, the report also analyzes the post-2019 economy and the U.S. policy response to help businesses and households during the ongoing pandemic.
“Homeownership is the primary source of wealth accumulation for most middle-class households, and the final years of the 2010s saw an increase in the homeownership rate at a time of steady-rising home values,” says Edward Seiler, executive director for the RIHA and the MBA’s associate vice president of housing economics. “Fast-forward to 2021, and the significant demand for home buying amid low inventory levels has further fueled gains in home prices and most homeowners’ equity. However, there are still wealth disparities by race. Among middle-wealth households, white households have higher homeownership rates and have more home equity.”
The RIHA’s chief purpose is to encourage and assist the establishment of broader-based knowledge of mortgage banking and real estate finance. The full 2019 and 2020 studies by the RIHA are available for download from the MBA website.
