We calculate that the “average” American household has a net worth of $101,600. If we were to subtract home equity (the amount of money people have paid toward their mortgages) from the calculations, the median net worth would be just $31,882.
We put the word “average” in quotes because in mathematical terms the number above is actually an estimation of the median net worth, which is the net worth at exactly at the midpoint between the lowest and highest net worth amounts. Because the extremely rich control such a high percentage of wealth, we believe looking at the median net worth is a better gauge of how the “average” American is doing financially. Using the mathematical average would skew the number higher than what feels “real” to most Americans.
As a reminder, net worth is calculated as assets minus liabilities. Assets mainly include money and real estate (in particular, people’s homes), while liabilities include debt on credit cards, loans, etc. Note that net worth can be a negative number if a person’s debts are more than their assets.
It is also worth noting that for many Americans much of their wealth is tied up in their primary residence, so the net worth of the household does not necessarily reflect the day-to-day financial well-being of the household in terms of access to liquid cash flow. This is why we also include the statistic for non-home equity net worth above.
To calculate the average American’s net worth, we used numbers from the Federal Reserve’s Financial Accounts of the United States (First Quarter 2018) report combined with estimates from the US Census Wealth and Asset Ownership report. The most recent Census net worth statistics are from 2013 (which the Census released in 2017). In order to make estimates for today, we looked at the relationship between the Census numbers and the Financial Accounts report numbers back in 2013, then used the most recent Financial Accounts report to estimate how much overall wealth has grown in comparison to 2013. We then multiplied the earlier Census numbers by the overall wealth growth rate.
Historical Net Worth:
- Fourth Quarter 2017: Average net worth: $100,427. Average outside of home equity: $31,514.
- Third Quarter 2017: Average net worth: $98,035. Average outside of home equity: $30,763.