Effects of Asset Valuations on U.S. Wealth Distribution

Diwan, Renuka; Duzhak, Evgeniya A.; Mertens, Thomas M.

Journal Article

Effects of Asset Valuations on U.S. Wealth Distribution

Abstract: Net household wealth is highly unequal across U.S. households, and the types of assets people hold tend to change according to their position along the distribution of wealth. The pattern of household portfolios shows that the top 1% of households hold most of their wealth in stocks, while home values are most important for the wealth of the bottom half of the distribution. Higher growth in equity values relative to real estate values therefore tends to widen the wealth distribution, as experienced during the coronavirus pandemic.

Keywords: Households - Economic aspects;