The wealthy have gotten significantly wealthier since 2020, despite a brief economic downturn caused by the pandemic, higher inflation, and higher borrowing costs.
The threshold for being in the top 10% of U.S. households by net worth has increased from about $1.3 million to about $1.8 million over the past five years, largely due to rising stock and home prices, according to a recent Visa analysis of 2024 U.S. Census Bureau survey data. This number reflects the value of a household’s home, car, savings, retirement, investments, and other assets, minus any debt.
In absolute terms, households already in the top 10% of net worth individuals have seen their wealth increase more than any other household over the past five years, according to the Federal Reserve’s distribution of wealth data.
The income required to be in the top 10% has also increased, rising from about $170,000 to about $210,000 over the same period, according to Visa’s analysis. For comparison, the median income in the United States as of 2024 is $83,730, according to data from the U.S. Census Bureau.
Visa defines a “wealthy” household as one that earns at least $210,000 or has a net worth of about $1.8 million, a level that represents more than 90% of U.S. households.
Approximately 12.2 million U.S. households fit this definition, with Gen X accounting for 57%, compared to 12% for Boomers, the analysis shows. Millennials and Gen Z together make up the remaining 31%.
It may not be surprising that Gen
Most of the increase in wealth was due to increases in home and stock values
The past five years have been unusually strong for households that already owned a home or had money in the market. Despite the coronavirus pandemic and soaring inflation, the job market remained strong and consumers continued to spend, keeping the economy on solid footing.
Home prices soared in 2020 due to tight supply and low mortgage rates, but remained near historic lows until the Federal Reserve raised benchmark interest rates in 2022 for the first time since December 2018.
Major stock indexes also quickly recovered from the early 2020 crash and continued to hit new highs, supported by massive federal stimulus and a rapid economic recovery as measured by gross domestic product (GDP).
These trends have caused wealth to grow much faster than income. Salaries increased, but at about half the pace. From 2020 to 2024, the threshold for the top 10% of net worth individuals grew by about 40%, while income grew by about 23%, according to Visa’s analysis.
We see the same thing with broader indicators. According to U.S. Census data, the median home price in the U.S. has increased about 25% over the past five years, while the S&P 500 has increased about 109%.
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