- Median net worth rose 2% to $215,900 over the three years through 2025 while average net worth rose 7% to $1,241,500, according to the Federal Reserve’s triennial survey. With cumulative inflation over that period well above 2%, the typical household’s real net worth declined.
- The gap those figures describe is wide. An average 5.75 times the median reflects concentration at the top, and the Fed reports the top 10% of families hold 56 times more wealth on average than the bottom 20%.
- Stock ownership fell to 56% of families from 58% between 2022 and 2025, during a period when the S and P 500 rose strongly, and the Fed said those in the bottom half of the income distribution accounted for nearly all of that decline in participation.
- Income inequality moved the other way. Lower-income families saw modest pay gains while incomes fell at the top, where a large share derives from volatile capital gains and business income. Pay gaps narrowed while wealth gaps widened.
What Happened?
The survey is regarded by economists as the most comprehensive data on US household wealth, income, debt and financial security. It shows Americans have spent down pandemic savings and are increasingly turning to debt and other means to sustain spending, which has stayed robust even as inflation outpaces wage gains. The share of families carrying any debt held steady at 77%, but the Fed highlighted as an indicator of potential distress that 8.6% of families had payment-to-income ratios above 40%, the largest share since 2010.
Why It Matters?
The participation data explains the divergence the Fed itself flags between record equity markets and consumer sentiment near record lows, and it is the most important finding here. Stock ownership fell precisely while the market rose, and the households that exited were overwhelmingly in the bottom half of earners. Those families sold or stopped participating before the gains accrued, which is how a rising market widens wealth disparities rather than narrowing them. Anyone puzzled by why strong markets have not improved how people feel about the economy has the answer: a growing share of people are not in the market. The median and average divergence tells the same story in a single pair of numbers. A median rising 2% over three years is a real decline once inflation is accounted for, while the average rose 7%, meaning gains concentrated where assets already were. For a wealth management readership the practical point is that clients sit firmly on the favourable side of this distribution, and the data explains why consumer-facing companies are reporting weakness that portfolio returns would not predict. The income finding is worth separating out because it runs counter to the headline. Inequality in pay actually narrowed, with top earners seeing income fall as capital gains and business income declined. Income and wealth are moving in opposite directions, which is why policy discussions that treat them as one thing produce confused conclusions, and it is relevant as wealth taxes advance in Hungary and are debated in California and New York. The debt figure is the forward-looking risk. Nearly 9% of families carrying payment obligations above 40% of income is the worst since the aftermath of the financial crisis, and it arrives as mortgage rates sit at 7.28%, auto loans reprice against five-year Treasury yields above 5%, and pandemic savings are exhausted.
What Next?
Watch whether stock market participation continues falling, since each cohort that exits compounds the divergence this report documents. Consumer credit performance is the series where the 8.6% payment-to-income figure will show up first, particularly in auto and card delinquencies. The next survey is three years away, so higher-frequency measures including consumer sentiment, which just recorded an all-time low in current conditions, are where deterioration will appear sooner. For policy, this data is what fuels wealth tax proposals, and Ray Dalio has argued that forcing unrealised gains into cash is among the triggers that ends asset bubbles. Whether any of these proposals advance after the November midterms is the question that follows from this report.
Affected Tickers and Coins: SCHW, HOOD, COF
Source: Bloomberg
