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- The median American household wealth up by 37% between 2019 and 2022.
- Almost everyone got richer.
- Inequality went down.
The recently released 2022 data from the Survey of Consumer Finances (SCF) paints an uplifting picture of financial progress in America. The most striking aspect is a 37% increase in the wealth of a typical American family since 2019, translating to an additional $51,800 for the median household, now standing at $192,900.
Summarized by Noah Smith:
- The increase is even across the board, with people at the bottom of the distribution gaining proportionally more than people at the top.
- Inequality is down, including racial inequality, educational inequality, urban-rural inequality, overall wealth inequality.
- Debt is much less of a problem.
Households in the bottom 25% of the wealth distribution saw their net worth catapult from a mere $400 in 2019 to $3,500 in 2022, a staggering rise of 900%.
Similarly, households headed by individuals under 35 years old experienced a 143% increase in wealth.
"Not only did every group get richer, but inequality decreased across multiple lines — age gaps, racial gaps, educational gaps, urban-rural gaps, and overall inequality all narrowed over the last three years", writes Noah Smith.
One of the underpinning factors behind this wealth augmentation is the substantial reduction in debt levels among Americans. The debt-to-income ratio has been on a downward trajectory since 2010, a trend further aided by financial measures implemented during the pandemic.
The ascension in wealth is not solely a narrative of diminishing debts. Assets, notably housing and bonds, have appreciated in value over the same period. The median bond-owning household saw an increase of about $70,000 in bond wealth, despite the rise in interest rates.
Implications for the middle class
The observed wealth uptick is particularly consequential for the middle class, whose financial backbone predominantly resides in housing assets. As housing prices soar, so does the wealth of middle-class households, providing a stronger financial footing for a significant portion of the American populace.
This financial upswing could potentially herald a more equitable distribution of wealth, underlining a positive trajectory toward alleviating longstanding economic disparities.
Through a lens of fact-based optimism, the figures from the SCF provide a tangible testament to the financial amelioration unfolding across the American demographic spectrum.