- Average net worth for Americans shot up 37% between 2019 to 2022.
- Increases were the most pronounced among those under 35, as well as those in the 55 to 64 age group.
Net worth for the average American skyrocketed 37% during the pandemic, thanks in part to government stimulus initiatives along with higher home and stock prices.
The Federal Reserve's Survey of Consumer Finances found that net worth for all age groups rose between 2019 and 2022. This was more than double the next-largest increase in net worth since 1989, when the Fed began the survey. Median net worth — which measures household assets like houses and vehicles, minus debts like mortgages and student loans — surged to $192,000 when accounting for inflation.
One of the stand-out numbers was median real net worth gains for Americans under 35 years old, who experienced a 143% rise, the largest of any group. While this group, comprised of younger millennials and Gen Zers, has a much smaller net worth than any other age group, median net worth grew from $16,100 to $39,000 during the three-year period.
The Fed noted in its report that "net improvements in economic performance, including rising house and corporate equity prices that well exceeded consumer price inflation," led to increases in net worth over the last three years.
For example, younger Americans have been investing more — some because of FOMO, or fear of missing out — and as of 2022, nearly a third of 25-year-olds owned a home, a Redfin analysis found.
So-called DINKs, or couples with "double income, no kids," also saw huge net worth increases, according to the Fed's survey.
Americans in the 55 to 64 age group saw median net worth gains of 48%, while those between the ages of 65 and 74 had a 33% rise in median net worth. What's more, the 65 to 74 group had the highest median net worth at nearly $410,000.
Mark Zandi, chief economist of Moody's Analytics, told CNBC that much of this wealth increase was caused by low interest rates at the start of the pandemic, which eased borrowing costs for consumers and made it less likely for people to carry high debt loads. Zandi also said home and stock prices, as well as other assets, spiked up after stimulus checks and other government support programs like enhanced unemployment benefits were issued and showed the US would recover from the early shocks of the pandemic.
For instance, median home prices grew from $139,100 in 2019 to $201,000 in 2022. Additionally, participation in the stock market increased from a median of $46,400 in 2019 to $53,200 in 2022 in directly or indirectly held stock between the 50th and 90th income percentiles on the Fed's survey.
A pause on student loan payments and interest also gave Americans more spending power throughout the pandemic.
Still, these net worth gains have benefited wealthier Americans the most, further exacerbating wealth inequality. Those in the 80th to 90th income percentiles saw median net worth gains of 69%, while those in the bottom 20th percentile only experienced a 24% increase. The Fed said those in the 20th percentile often do not own assets like homes.
This wealth inequality is stark: the median net worth for those in the bottom 20th percentile was $14,000 in 2022. For those in the top 10th percentile, that figure was $2.56 million.
Wealth inequality among racial groups narrowed over the three-year period but still remained elevated, given the average white family had about six times more wealth than the average Black family, according to the Fed.