(March 26): The richest half of American families owned about 97.5% of national wealth as of the end of 2024, while the bottom half held 2.5%, according to the latest numbers from the Federal Reserve.

The lower 50% of the distribution saw their wealth share improve marginally during president Joe Biden’s term in office, climbing from 2.2%. The 66.6 million households in that group collectively owned about US$4 trillion (RM17.7 trillion) in net wealth at the end of last year, an increase of US$1.25 trillion from four years earlier.

Over the same period, America’s richest households — the 133,000 that make up the top 0.1% — gained more than US$6 trillion in net wealth, mainly thanks to a surge in the value of corporate equities and mutual fund shares.

This group holds around one quarter of all US equities, accounting for almost half their wealth, while about one-fifth is held in private business holdings. Lower down the distributional ladder, real estate represents a larger share of household wealth.

The top 0.1% expanded their share of total wealth to a record 13.8% at the year’s end, up from 13% in the same period of 2020. The bottom half’s share climbed to 2.7% in mid-2022, the highest in Fed data going back to 1989, before dropping back to 2.5%.

The group that saw its wealth share narrow over the past four years is the affluent households that make up the 90th to 99th percentiles. These families saw a 2.4 percentage point decline in their share of the total.

Overall, the wealth gains at the top end of the distribution during the period were accompanied by a decrease in debt levels, with the top 1% of households managing to pay down their net mortgage debt. Meanwhile, families lower down the scale added debt along with assets — including some US$800 billion in high-interest consumer credit amassed over the four-year period.

Broken down by age cohorts, the period saw US wealth increasingly accrue to older households. Over the past four years, the wealth share held by people age 70 and older rose by 3.8 percentage points, to 31.4% of the total. These older Americans own 38.3% of corporate equities, up from 32.9% in late 2020.

The gains are partly a function of demographics, as the large Baby Boomer generation age into their 70s. People born before 1965 also own more than half of US real estate wealth.

Uploaded by Magessan Varatharaja