Wall Street Rally Overpowers Housing Slump to Lift Household Wealth

Rising stock prices helped drive an increase in Americans’ net worth in the fourth quarter of 2025, the Federal Reserve said Thursday (March 19).

The net worth of households and nonprofit organizations increased by $2.2 trillion during the quarter and reached $181.4 trillion as of Dec. 31, the Fed said in its latest “Financial Accounts of the United States.”

The Fed said in the report that “modest gains on corporate equity assets more than offset a decline in the value of real estate.”

During the fourth quarter, the value of directly and indirectly held equity increased by $1.6 trillion, which more than offset a roughly $400 billion decline in the value of real estate, according to the report.

“Because the ownership of such assets — particularly equities — is concentrated among higher-income households, not all households are equally impacted by changes in asset prices,” the Fed said in the report.

The ratio of net worth to disposable personal income, which measures households’ ability to finance consumption out of their wealth, rose to 7.94 in the fourth quarter.

The Fed said in the report that this figure is “still below its record high in [the first quarter of 2022] but well above the historical average.”

Household debt increased by 3.3% during the quarter, while the ratio of household debt to disposable personal income remained flat at 0.90. That ratio is near its lowest level since the 1990s, excluding 2020 and 2021 when pandemic-related income affected the figure, per the report.

“Household debt expanded rapidly in the immediate aftermath of the pandemic, but the pace of growth has slowed substantially over the past few years,” the Fed said in the report.

The PYMNTS Intelligence report “Income Divides: A Deep Dive on Household Income Differences in U.S. Consumer Expectations” found that there is a 15-point gap in consumer sentiment between higher- and lower-income consumers.

Those earning $150,000 or more a year had a PCEI score of 63.1, while those earning less than $50,000 had a score of 48.0, according to the report.

This report is based on the inaugural installment of the PYMNTS Consumer Expectations Index (PCEI).