The Real State of Family Wealth: Quarterly Trends in Average Wealth and Demographic Wealth Inequality

The Institute for Economic EquityThe Real State of Family Wealth was introduced by the Center for Household Financial Stability, which became the Institute for Economic Equity in 2021. The authors would like to thank Ray Boshara and William R. Emmons for previous contributions to earlier versions of this work. presents average real (i.e., inflation-adjusted) wealth for various demographic groups using the Federal Reserve Board’s Distributional Financial Accounts (DFAs).

Our team documents quarterly trends in average U.S. family wealth and wealth inequality from 1989 onward.

Key Takeaways

For the second quarter of 2022 (through June 30):

• On average, Black and Hispanic families owned about 25 cents and 23 cents, respectively, per $1 of white family wealth. These substantial gaps remain largely unchanged despite fluctuations from 1989 to 2022.
• The younger American family (millennials and Gen Zers), on average, has narrowed early wealth gaps with Gen Xers at similar ages.Wealth holdings of younger Americans include households headed by someone born in 1981 or later. This group comprises households from two generations: millennials and Gen Zers. In future releases, wealth holdings will be broken out for each of these generations once the underlying data allow us to do so. Recently, average wealth for families of all ages has been greater than for same-age families in the past, though this is especially true for middle-aged and older families.
• The average family headed by a four-year college graduate has become much wealthier over the past several decades than the average family headed by someone with less education. In particular, those with less than a high school diploma struggled to accumulate wealth, on average.
• On average, real family wealth dropped for most groups in the first half of 2022. The exception was Hispanic families, for whom average wealth reached an all-time high. In addition, wealth holdings of families without a high school diploma remain well below historic levels.
• The data provide a timely look at how wealth has been affected during the COVID-19 recession and ensuing quarters. Average wealth fell for most groups in the first quarter of 2020, but many of those losses were reversed in the second quarter, reflecting the volatility in the value of financial assets seen early in the pandemic. Average wealth levels surged for almost all groups during the pandemic recovery and through 2021. However, the first half of 2022 has eroded much of the gains from the past two years for many groups.
• These averages are sensitive to families at the top of the wealth distribution. Therefore, the plight of asset-poor American families may be obscured in these data.

Visualizing Wealth Data

View more detailed information about:

Racial and Ethnic Household Wealth Trends and Wealth Inequality

Generational and Age Household Wealth Trends and Wealth Inequality

Educational Household Wealth Trends and Wealth Inequality

About the Data and Data Sources

The Real State of Family Wealth supplements our other research (e.g., the state of wealth inequality), which generally uses median wealth instead of average wealth—producing different estimates of racial, generational and educational wealth gaps. Because of how wealth is distributed, average wealth estimates are much higher than median wealth estimates and therefore are not representative of a typical family’s experience.

The DFAs provided by the Board give quarterly estimates of nominal, aggregate U.S. household wealth. We make two important adjustments:

• We adjust the DFA estimates for inflation using the consumer price index, yielding household wealth values in real terms. This adjusts for changes in the purchasing power of a dollar over time.
• We also adjust for household population. This allows us to account for changing group sizes and to express wealth in terms of the average family’s household finances.

The result is average real household wealth values, available on a quarterly basis.

The Federal Reserve Board creates the DFAs by combining data from the triennial Survey of Consumer Finances (SCF) and the quarterly Financial Accounts of the United States. See a paper by the Board of Governors of the Federal Reserve System for a discussion of how the estimates are constructed. Many of our reports, like the Demographics of Wealth series, use the SCF instead of the DFAs. The SCF is an extensive survey that allows us to examine median household wealth (wealth at the middle or 50th percentile), which we believe is more representative of a demographic group’s typical economic experience than is average wealth. However, the SCF is released only every three years, with the most recent survey featuring 2019 data.

While we prefer the depth of information provided by the SCF data, the DFAs allow us to study wealth trends in a more timely fashion, though with less flexibility than the SCF and an inability to examine median household wealth. Because specific DFA estimates change from quarter to quarter as data are updated, we advise placing more weight on trends than specific values. Overall, as average wealth trends roughly track median wealth trends, we find large wealth gaps and low levels of wealth among vulnerable groups using both the SCF and DFAs.  

Endnotes

1. The Real State of Family Wealth was introduced by the Center for Household Financial Stability, which became the Institute for Economic Equity in 2021. The authors would like to thank Ray Boshara and William R. Emmons for previous contributions to earlier versions of this work.
2. Wealth holdings of younger Americans include households headed by someone born in 1981 or later. This group comprises households from two generations: millennials and Gen Zers. In future releases, wealth holdings will be broken out for each of these generations once the underlying data allow us to do so.