American households got a bit richer between 2016 and 2019, according to a new report released on Dec. 2 by the Mortgage Bankers Association’s (MBA) Research Institute for Housing America (RIHA).
The RIHA study “The Distribution of Wealth in America Since 2016” found that the median net worth of U.S. households increased by 17.6% in those three years, marking the highest amount since the Great Recession.
Data from the Federal Reserve Board’s triennial Survey of Consumer Finances (SCF) was used to study the distribution of household wealth, its main components and how the evolution of household wealth has affected different wealth classes in the three-year window.
The breakdown:
- The average net worth of Americans increased by 1.9%during those three years, from $733,000 to $747,000.
- The average net worth of the typical household—the family in the middle class— increased from $103,000 to $127,000 between 2016 to 2019.
- The increase is the highest since 2007.
- The median net worth of every racial and ethnic category also increased, with the most significant increases coming from Black and Hispanic households.
The takeaway:
“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. Americans became richer, with middle-class households on the receiving end of a bigger slice of the wealth gains,” said Dr. John C. Weicher, author of the report and director for the Center for Housing and Financial Markets at the Hudson Institute.
He added that the increase in homeownership and the steady rise in home values and the stock market drove the increase in middle-class wealth.
“Thankfully, the quick rebound in the labor market and the unprecedented policy response have mostly kept households afloat during the COVID-19 pandemic, and the strong housing market and stock market have boosted overall wealth,” Weicher said.
“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,” said Edward Seiler, RIHA executive director and MBA’s associate vice president of Housing Economics, in a statement. “Fast-forward to 2021, and the significant demand for home-buying amidst low inventory levels have 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.”
You can find the study here.
Jordan Grice is RISMedia’s associate online editor. Email him your real estate news ideas to jgrice@rismedia.com.
