NEW YORK: New Federal Reserve data show the wealth gap in the United States widened to its largest level in more than three decades as rising stock and home values lifted the richest households far more than everyone else. In the third quarter of 2025, total U.S. household net worth climbed to a record $181.6 trillion, supported by a strong equities market and continued gains in real estate values. The increase added to a long-running trend in which assets that appreciate fastest are held disproportionately by households at the top of the wealth ladder.
The Fed’s Distributional Financial Accounts show the top 1% of households held 31.7% of U.S. household wealth in the third quarter, the highest share since the series began in 1989. By comparison, the bottom 50% held 2.5% of the nation’s wealth, leaving the vast majority of net worth concentrated among a relatively small group of households.
Using the Fed’s aggregate figure, the top 1% held roughly $58 trillion in net worth in the quarter, while the bottom half held roughly $4.5 trillion. The middle also remained squeezed: the 50th to 90th wealth percentiles held about one third of total wealth, underscoring how quickly the distribution tilts upward at the very top.
Asset composition helps explain the widening gap. Corporate equities and mutual fund shares are concentrated among high-wealth households, so periods of strong market performance tend to push the top share higher. The Fed’s release showed large quarterly gains in the value of stock portfolios alongside a smaller increase in real estate holdings, amplifying the advantage for households with substantial financial assets.
Tax policy and inequality
Federal tax policy has also played a role in shaping after-tax outcomes over time. The Tax Cuts and Jobs Act signed by President Donald Trump in 2017 cut the corporate tax rate from 35% to 21% and reduced individual income tax rates across brackets while preserving preferential rates on long-term capital gains and qualified dividends. Analyses by nonpartisan and academic policy researchers have found that higher-income households captured larger dollar benefits from those changes, reflecting their greater exposure to corporate profits, capital income, and business ownership.
More recently, a Congressional Research Service review published in 2025 assessed empirical studies of the 2017 law’s economic effects and reported that the evidence did not show large, broad-based growth impacts sufficient to offset revenue losses. The combination of large asset-market gains and tax rules that continue to favor capital income has left wealth accumulation more sensitive to financial-market cycles than to wage growth for many households.
The wealth data arrive as policymakers debate how to extend or revise major provisions of the 2017 law and how to address persistent gaps in savings, homeownership, and retirement security. The Fed’s distributional measures are based on a blend of the Survey of Consumer Finances and the Financial Accounts of the United States, providing a quarterly view of how wealth shifts across groups rather than a snapshot of incomes.
What the Fed data show next
The third-quarter figures also highlight that net worth growth can coincide with rising liabilities. Household debt increased during the period, and consumer credit growth tends to weigh more heavily on lower-wealth households that rely more on borrowing. At the same time, households with large portfolios can see net worth rise quickly when markets surge, even if borrowing costs remain elevated.
With the top 1% holding nearly one third of household wealth and the bottom half holding a small fraction, the Fed’s latest release underscores how closely U.S. wealth inequality tracks asset ownership. The numbers document a gap that has widened across multiple administrations and economic cycles, with the sharpest gains accruing to households already positioned to benefit most from appreciating financial assets. – By Content Syndication Services.