The State of U.S. Wealth Inequality

Average Wealth by Primary Race or Ethnicity, Fourth Quarter of 2022

SOURCES: Distributional Financial Accounts and Institute for Economic Equity calculations.

This bar chart shows the average wealth for Black, Hispanic and white households in the fourth quarter of 2022. Black families had about $956,000 less wealth, on average, compared with white families, while Hispanic families had about $969,000 less wealth, on average, than white families. In other words, Black families had 25 cents for every $1 of white family wealth, while Hispanic families had 24 cents per every $1 of white wealth. Racial and ethnic wealth gaps have changed very little over the past few decades.

Distribution of U.S. Households and Wealth by Primary Race or Ethnicity, Fourth Quarter of 2022

SOURCES: Distributional Financial Accounts and Institute for Economic Equity calculations.

NOTE: Racial and ethnic groups are mutually exclusive; they are based on the primary race or ethnicity of the survey respondent.

White households continue to own a disproportionately greater share of total family wealth. Though only representing 64.1% of households, white households owned 82.4% of total family wealth in the fourth quarter of 2022; this is 29% more wealth than their representation in the U.S. might predict. In contrast, Black families accounted for 14.2% of households and owned 4.6% of total family wealth (68% less wealth given their household share), while Hispanic families represented 9.9% of households and owned 3.1% of total family wealth (69% less wealth).The Federal Reserve Board’s Distributional Financial Accounts groups households based on the primary race/ethnicity of the survey respondent. Groups in the public dataset are mutually exclusive. The question on race includes white, Black/African American, and Hispanic/Latino as options. In the public dataset, the remainder of respondents are grouped into a diverse “other or multiple races” group, which includes Asians, American Indians, Alaska Natives, Native Hawaiians, Pacific Islanders, other races and multiple racial identifications. Because the diversity of this category of other or multiple races potentially masks great intragroup wealth variation, it is not a focus in The State of U.S. Wealth Inequality.

Cumulative Changes in Average Wealth by Race and Ethnicity

SOURCES: Distributional Financial Accounts and Institute for Economic Equity calculations.

NOTES: Vertical bars indicate recessions. Wealth was inflation-adjusted to 2021 dollars.

Since the end of the Great Recession, white and Black wealth have followed similar growth trends, on average. Hispanic wealth, however, fell for several years before recovering rapidly. Since the COVID-19 recession, Hispanic wealth, on average, grew steadily and then plateaued. In contrast, white and Black average wealth dipped early in the recession, recovered and then subsequently dipped in recent quarters. Overall, white average wealth grew 59%, from $825,000 to $1,275,000, since the end of the Great Recession, Black wealth grew 57%, from $204,000 to $319,000, and Hispanic average wealth grew 80%, from $164,000 to $306,000.

Average Wealth at Age 33 or 34 by Generation

SOURCES: Distributional Financial Accounts and Institute for Economic Equity calculations.

NOTES: The values are calculated when each generation was relatively young. The data are based on the quarter and year when the baby boomers’ average age was 34 (1989:Q3), when the Gen Xers’ average age was 33 (2006:Q1) and when the millennials and Gen Zers’ average age was 33 (2022:Q4).

Younger American (millennials and Gen Zers) families had lower family wealth, on average, than Gen Xers and boomers did when both generations were close to the same average age (33 or 34). In the fourth quarter of 2022, younger Americans owned 75 cents for every $1 of wealth owned by Gen Xers, on average, at the same age (2006:Q1). Younger Americans owned 84 cents for every $1 of wealth owned by boomers, on average, at a similar age (1989:Q3).

Generational Shares of U.S. Households and Wealth at Same Age

SOURCES: Distributional Financial Accounts and Institute for Economic Equity calculations.

NOTES: Shares are calculated when each generation was relatively young (at the average age 33 or 34). The data are for the quarter in the year when the generation was at that average age.

When households are younger, they tend to have lower levels of wealth. To address this issue, we compared household and wealth shares across generations when their members were relatively young (at the average age of 33-34).

Each generational group owned less wealth than their share of the household population. Baby boomers represented 37.5% of households in the third quarter of 1989, yet they owned only 21.1% of total family wealth in 1989; this is 44% less wealth than their representation in the U.S. might predict. Gen X families accounted for 28.1% of households and owned 9.9% of total family wealth (65% less wealth given their household share) in 2006. Younger American (millennial and Gen Z) families represented 30.8% of households and owned 6.2% of total family wealth (80% less wealth) in 2022. The baby boomer’s shortfall was the smallest of the generations.

Average Wealth by Generation

SOURCES: Distributional Financial Accounts and Institute for Economic Equity calculations.

This figure shows average, inflation-adjusted family wealth of three different generations during their young- to mid-adult years. Values are centered on the average age of the generation, based on the age of the reference person within households. For example, the average age of younger American (millennials and Gen Zers) families (born 1981 or later) in the fourth quarter of 2022 was 33, and Gen Xers (born 1965-1980) had an average age of 33 in the first quarter of 2006.

While trailing Gen Xers for the beginning of their adult lives, younger American families’ average wealth began to surpass that of Gen Xers at age 30. However, as of the first quarter of 2022, they had fallen behind again, reflecting the current macroeconomic conditions affecting this generation.

Between ages 34 and 50, the average wealth of Gen Xers and boomers has crossed various times, which is indicative of larger macroeconomic forces. For example, in 2006 Gen Xers’ average wealth was higher than that of boomers in 1989, but it fell sharply during the Great Recession and took years to recover.

Average Wealth by Education, Fourth Quarter of 2022

SOURCES: Distributional Financial Accounts and Institute for Economic Equity calculations.

NOTE: College represents families with at least a bachelor’s degree; other education levels represent the families’ highest completed education.

This figure shows the average wealth for families by education level in the fourth quarter of 2022. Families headed by someone with some college education (but no four-year degree) had 31 cents in wealth for every $1 held by families headed by a college graduate. Those with a high school diploma owned 24 cents for every $1 of college-graduate wealth, and those with less than a high school diploma had 10 cents for every $1.

Distribution of U.S. Households and Wealth by Education, Fourth Quarter of 2022

SOURCES: Distributional Financial Accounts and Institute for Economic Equity calculations.

NOTE: College represents families with at least a bachelor’s degree; other education levels represent the families’ highest completed education.

In the fourth quarter of 2022, households headed by a college graduate owned the disproportionately highest share of total family wealth. They owned 71.5% of total family wealth despite making up only 38.5% of households, an advantage of 86% greater wealth than we might expect based on their household representation. Families headed by someone with some college education but no degree, those with at most a high school diploma, and those with less than a high school diploma collectively owned 42%, 56% and 81% less wealth, respectively, than we might expect based on their household representation.

Cumulative Changes in Average Wealth by Education

SOURCES: Distributional Financial Accounts and Institute for Economic Equity calculations.

NOTES: College represents families with at least a bachelor’s degree; other education levels represent the families’ highest completed education. Vertical bars indicate recessions. Wealth was inflation-adjusted to 2021 dollars.

This figure shows the average inflation-adjusted wealth of families with a given educational attainment. On average, all families have greater wealth than similarly educated families did after the Great Recession ended. In the fourth quarter of 2022, the wealth of families with a college degree was 34% greater on average than similar families in 2009 (increasing from $1,371,000 to $1,841,000). In contrast, growth in percentage terms has been generally more pronounced for families with some college, who had 40% more wealth (increasing from $409,000 to $573,000), and those with just a high school diploma, who had 45% more than similar families had in 2009 (increasing from $303,000 to $438,000). The least educated group, those without a high school diploma, had 32% more than they had in 2009 (increasing from $142,000 to $188,000). The disparity in dollar values of those gains reflect the underlying educational wealth gap, a gap that has expanded considerably over the past few decades.

1. The State of U.S. Wealth Inequality replaces the Real State of Family Wealth, a product launched in 2020.
2. Average wealth estimates are much higher than median wealth estimates and therefore are more representative of wealthier families’ experiences. However, median (i.e., the middle of the distribution) data on household wealth aren’t available on a quarterly basis. Our latest data on median wealth gaps by demographic group are available here.
3. 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.
4. The Federal Reserve Board’s Distributional Financial Accounts groups households based on the primary race/ethnicity of the survey respondent. Groups in the public dataset are mutually exclusive. The question on race includes white, Black/African American, and Hispanic/Latino as options. In the public dataset, the remainder of respondents are grouped into a diverse “other or multiple races” group, which includes Asians, American Indians, Alaska Natives, Native Hawaiians, Pacific Islanders, other races and multiple racial identifications. Because the diversity of this category of other or multiple races potentially masks great intragroup wealth variation, it is not a focus in The State of U.S. Wealth Inequality.

The State of U.S. Wealth Inequality is produced by the Institute for Economic Equity. We use the Federal Reserve Board’s Distributional Financial Accounts (DFAs) as our dataset, which give quarterly estimates of nominal, aggregate U.S. household wealth. Wealth, or net worth, is defined as the sum of assets less liabilities. We make two important adjustments to the DFAs:

• We adjust 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, inflation-adjusted household wealth values, available from 1989 onward on a quarterly basis.

The State of U.S. Wealth Inequality supplements our other research which generally uses median wealth instead of average wealth—producing different estimates of racial, generational and educational wealth gaps.

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. Because of how wealth is distributed, average wealth estimates are much higher than median wealth estimates and therefore are not representative of a typical (i.e., median) family’s experience.