The last three years have gone well financially for the average American — and the median American too.
Recall that a median is the level with half the numbers above it and half below.
Real net worth for the median U.S. household soared 37% to $192,900 at the end of 2022 from $141,100 at the end of 2019, according to the Federal Reserve’s latest (October) Survey of Consumer Finances.
That rate of increase was a record high for the “history of the modern survey,” according to the report.
So some economic woes for the middle class may not be as severe as feared. Wealth was boosted by the rising value of stock prices, home values, savings and pandemic assistance, along with lower spending early in the pandemic and low interest rates through much of 2022.
A total of 21% of households held stock in 2022, up from 15.2% in 2019. The amount of households with retirement plans climbed to 54.3% from 50.5%.
A narrowing wealth gap
Surprisingly, the wealth gap between rich and poor narrowed over the past three years. The biggest wealth increase during that period came to the 13 million families in the 80th to 90th percentile of income distribution. Their median wealth climbed 69% to $747,000.
The survey covers 131 million households in total.
Another encouraging number: the median ratio of household debt payments to income slid to a record low of 13.4%.
Meanwhile, 16 million families were millionaires in 2022, up 63% from 9.8 million three years ago. The latest figure represents 12% of the families represented in the survey.
And 8 million families were worth at least $2 million in 2022, surging 70% from 4.7 million in 2019.
On the downside, income disparity continues to define the landscape across the U.S. Median household income dropped 2% for Black Americans and 1% for Hispanics during the three years, compared to a 1% increase for white households.
And housing affordability is still a real problem. The median home value totals more than 4.6 times median family income.
