The average American household has a net worth of $1.06 million

The median inflation-adjusted net worth for the average household was $1.06 million in 2022, according to the Federal Reserve’s Survey of Consumer Finances. EMS-FORSTER-PRODUCTIONSGetty Images

It may be hard to believe when money is tight amid the cost of living crisis, but the average American household has achieved millionaire status.

More specifically, the average inflation-adjusted net worth of an American household was $1.06 million in 2022, according to the Federal Reserve’s Survey of Consumer Finances.

For comparison, in 2019 the average net worth for the average household was $868,000, an increase of 23%.

Despite the economic challenges caused by the pandemic and then the war in Ukraine, last year the average household was in a much better situation than before the pandemic.

Even if you look at the median, another measure of average that represents the middle point of a ranking and is less likely to be skewed by exceptionally high or low numbers, the typical American household was worth $192,900.

While this number is less exciting for ambitious workers, it still represents an impressive 37% increase after inflation over three years.

The average is much higher than the median because it is increased by the top 10% of earners, who have an average net worth of $6.63 million, according to the Fed. Meanwhile, households in the bottom 10% had an average net worth of $5,300 in 2022.

Average net worth is calculated by adding the net worth of all U.S. households and then dividing by the number of households.

The housing boom is creating millionaires

The study highlights the importance of climbing the wealth ladder if you want to build wealth.

Nearly two in three American families were homeowners last year, reflecting a slight increase from the previous three years, and with the housing market booming during the pandemic, landlords’ pockets have expanded.

The average net worth of homeowners was $1.53 million in 2022 compared to just $155,000 for renters. Even in the UK, more than 41,000 home owners have become millionaires, up 6% on the previous year, as house prices soared last year.

But while skyrocketing house prices have benefited those already on the career ladder, it creates a financial setback for aspiring homeowners. Another Fed study released in May found that 65% of Americans renting do so because they can’t afford the down payment to buy a home.

Despite this, 3.5 million people lost their millionaire status last year

While the average household is getting richer, the actual number of millionaires is decreasing.

The number of adults with assets worth more than $1 million fell from 62.9 million at the end of 2021 to 59.4 million at the end of 2022, according to UBS’s annual wealth report, the sharpest decline since the 2008 financial crash. .

Even in the US, where there are many more millionaires than anywhere else in the world, 1.8 million people lost their millionaire status last year. Currently, the total number of millionaires in the US is approximately 22.7 million.

In the UK, the number of millionaires fell by 440,000 to 2.6 million, the third biggest decline after Japan, which fell from 3.2 million to 2.6 million. Meanwhile, the number of people worldwide with more than $50 million fell by 22,500 to 243,000.