Paradoxically, during the pandemic the wealth of American households reached an all-time high | The NY Journal
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Rising home prices greatly benefited higher-income Americans
The stimulus check allowed for an emergency fund of $ 400.
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PAUL J. RICHARDS / AFP / Getty Images
Americans Net Worth reached an all-time high, rising by the highest amount in nearly 70 years, even as the country struggled with the coronavirus pandemic. However, not all saw gains.
The net worth of American households reached $ 119 trillion in the second quarter, increasing by $ 7.6 trillion from the previous quarter, according to the Federal Reserve. This is the steepest increase since 1952 and represents almost $ 380 billion dollars more than the fourth quarter of 2019, when the pandemic had not yet reached the United States.
The rise in house prices greatly benefited higher-income Americans instead of those with lower income.
Actions added $ 5.7 trillion to household wealth versus the first quarter, according to the Fed. After the March swoon, the Standard & Poor’s 500 index rose more than 45%, helping Americans with investments in retirement or brokerage accounts.
About 45% of Americans own no shares, according to an April poll by Gallup. White Americans owned 91.2% of the shares in the first quarter of 2020, while blacks and Hispanic Americans accounted for just 1.6% each, according to the Fed.
Also during the pandemic the value of occupied real estate grew $ 458 billion USD since the first quarter, according to the Fed. While much of the housing market stagnated in April when the states closed, buyers quickly returned to the market in May and June, raising prices.
Rising house prices benefit middle-income people. According to the Fed, only the second and third quintiles of the population collectively owned 35% of households, while the bottom two quintiles only 10.6%. The top quintile owned 57.7 percent of all real estate.
The savings
During the second quarter, savings also increased by $ 760,000 million thanks to stimulus checks and the application of unemployment benefits but also to the reduction of expenses made by high-income households, especially in restaurants and travel.
People with low and middle incomes also showed more financial stability, including a record percentage of Americans who reported they could cover an emergency expense of up to $ 400 dollars.
Yet the stimulus payment and unemployment benefits have expired threatening those gains.
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