RIHA: Americans’ Net Worth Rose 17.6% From 2016 To 2019

The median net worth of American households rose 17.6% between 2016 and 2019, according to a new report from the Mortgage Bankers Association’s (MBA) Research Institute for Housing America (RIHA).

The report, titled The Distribution of Wealth in America Since 2016, found that median net worth increased from $103,000 in 2016 to $127,000 in 2019, the highest amount since 2007. 

“The increase in homeownership, and the steady rise in home values and the stock market drove the increase in middle-class wealth. The median net worth of every racial and ethnic category also increased, with the largest increases coming from Black and Hispanic households,”  said Dr. John C. Weicher, author of the report and Director for the Center for Housing and Financial Markets at the Hudson Institute.

The report notes that the distribution of wealth changed drastically from the trend seen between 2007 and 2016, which showed wealth increasing mostly among the richest 10% of households. For 2016-2019, middle-class households received about 40% of the total $3.7 trillion wealth increase, while the richest households received about 60%, resulting in the share of net wealth held by the rich falling from 77.1% to 76.5%.

“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,” Weicher said.

However, for the bottom 30% of households by net wealth, their debts exceeded their assets by $327 billion in 2019 from $304 billion in 2016, a 7.6% jump.

Gains for middle-wealth households came mostly from increases in equity. Homeownership among this group rose from 83.2% to 84.7%, and the average value of their homes increase by 5.1%. Their total equity in their homes rose nearly $10 trillion, to $9.6 trillion in 2019.

Overall homeownership rose in 2020 and 2021, suggesting American wealth will continue to increase moving forward. “[T]he significant demand for homebuying amidst low inventory levels has further fueled gains in home prices and most homeowners’ equity,” said Edward Seiler, Executive Director of RIHA and MBA’s Associate Vice President, Housing Economics.

“However, there are still wealth disparities by race. Among middle-wealth households, white households have higher homeownership rates and have more home equity.”

Black homeownership remains a significant problem for the industry. In the past 15 years, Black homeownership rates dropped to levels on par with the 1960s, when race-based discrimination was legal.

No city has successfully closed the gap between White and Black homeownership. So while Black households have benefitted from the increase in American wealth overall, their future wealth may be hindered by homeownership rates.