1

Demographic Programs

U.S. Census Bureau

U S C E N S U S B U R E A U

Helping You Make Informed Decisions

U.S. Department of Commerce

Economics and Statistics Administration

U.S. CENSUS BUREAU

P70-75

Did You Know? Homes Account

for 44 Percent of All Wealth

Findings from the SIPP

Household Economic Studies

1995

Issued May 2001

Current

Population

Reports

By

Sandra Luckett

A household’s economic well-being is measured by the household’s income and

wealth. Income is defined as the flow of

resources to a household, for example,

earnings and interest from banking accounts; wealth is the household’s asset

accumulation minus any debts (see box).

Wealth (for example, equity in a home) is a

particularly important dimension of wellbeing and is discussed in this report.

With data collected by the Survey of Income and Program Participation (SIPP) between February and May 1995, this report

examines the median net worth (wealth)

in 1995 of households with

different types of demographic characteristics.

Median net worth

remains stable.

The median American household had a net worth, or

wealth, of $40,200 in 1995,

statistically unchanged from

the 1993 median net worth

of $39,590 (in 1995 dollars).

This overall stability masks

changes for particular financial resources between the

2 years. The median values

of interest-earning assets at

financial institutions and U.S.

savings bonds fell. These

declines were offset by gains

in the median values of interest earning assets not

held at financial institutions,

stocks and mutual funds,

rental property, motor

vehicles, and individual retirement accounts (IRA) or Keogh accounts.

Wealth is concentrated at the top.

The net worth of American households

rises sharply with income. In 1995, the

median net worth of households in the top

fifth of the income ladder was 23 times

higher than that of households in the bottom fifth. The 1995 median net worth for

the bottom fifth, $5,000, was approximately —

• One-fourth of that for the second lowest

fifth of the income ladder,

Assets include: interest-earning assets held at financial institutions (passbook savings accounts,

money market deposit accounts, certificates of deposit, and interest-earning checking accounts),

other interest-earning assets (money market funds,

U.S. Government securities, and municipal or corporate bonds), stocks and mutual fund shares, mortgages held for sale of real estate, amounts due

from sale of business or property, regular checking

accounts, U.S. savings bonds, real estate, IRAs and

Keogh accounts, and motor vehicles.

Debts include: secured liabilities (mortgages on

real estate, debt on a business or profession, vehicle loans, and margin and broker accounts), as

well as unsecured liabilities (credit card and store

bills, medical bills, educational loans, and loans

from individuals and financial institutions).

The Median is the middle value in the ordered distribution of all U.S. households. Half of households

have a value that lies above, and half below, the

median value.
2 U.S. Census Bureau

• One-seventh of that for the

middle fifth, and

• One-tenth of that for the second

highest fifth.

Households in the top fifth of the

income ladder were more likely

than those in the bottom fifth to

own —

• Their home (85 percent compared with 41 percent),

• Stocks and mutual fund shares

(43 percent compared with

6 percent),

• IRA or Keogh accounts (48 percent compared with 6 percent),

and

• A business or profession (18 percent compared with 5 percent).

Net worth rises with age,

peaks at age 65 to 69, and

then begins to decline.

Up to a point, increasing age represents more time to accumulate

wealth. In 1995, wealth peaked

for those aged 65-69, at approximately $106,000, and then began

to decline gradually with increasing age. Median net worth was 15

times higher for households with a

householder aged 65 to 69 than for

those with a householder under 35

years old. The net worth of householders aged 75 and over was

about 11 times that of householders under 35 years old.

Net worth differs by race

and ethnicity.

White non-Hispanic households had

a median net worth of $49,030,

about seven times that of Black

households ($7,073) and Hispanic

households ($7,255). (There is no

statistical difference in median

wealth when comparing Black and

Hispanic households.)

Figure 1.

How Our Wealth Is Divided Up

Source: U.S. Census Bureau, Survey of Income and Program Participation, 1995.

Distribution of Measured U.S. Net Worth by Asset Type: 1995

(Percent)

Unsecured liabilities

Checking accounts

U.S. savings bonds

Other financial investments

Other real estate

Other interest-earning assets

Business or profession

Rental property

Stocks and mutual fund shares

IRA or Keogh accounts

Motor vehicles

Interest-earning assets

at financial institutions

Own home 44

10

8

8

8

6

6

5

4

3

1

1

-4

Figure 2.

What Our Assets Are Worth 

Source: U.S. Census Bureau, Survey of Income and Program Participation, 1995.

Median Value of Holdings for Asset Owners by Asset Type: 1995 

(Dollars)

Checking accounts

U.S. savings bonds

Unsecured liabilities

Interest-earning assets

at financial institutions

Motor vehicles

Business or profession

Stocks and mutual fund shares

IRA or Keogh accounts

Other interest-earning assets

Other real estate

Other financial investments

Rental property

Own home 50,000

34,250

29,100

22,000

15,000

15,000

9,000

8,000

6,675

2,537

2,500

700

500
U.S. Census Bureau 3

The median net worth of households in the top 20 percent of the

income ladder was —

• $123,800 for White non-Hispanic

households,

• $40,900 for Black households,

and

• $80,400 for Hispanic households.

For households in the bottom

20 percent, median net worth

was —

• $9,700 for White non-Hispanic

households,

• $1,500 for Black households, and

• $1,300 for Hispanic households.1

Household type also makes

a difference.

The net worth of households maintained by married couples was

$64,694, about four times that of

households maintained by women

with no spouse present ($14,949)

and of those maintained by men

with no spouse ($16,346).

Higher levels of education

are related to greater

wealth...

Householders who had less than

12 years of education had a median household net worth of

$20,092 in 1995, while householders with 4 or more years of college

had a significantly higher amount

($80,416).

...as is participation in the

labor force.

In 1995, households with householders having a job for the entire

4-month period from which data

1There is no statistical difference when

comparing the bottom 20 percent of Black and

Hispanic housholds.

Figure 3.

With Higher Income Comes Greater Wealth

1Quintile upper limits for 1995, in terms of monthly income, were: lowest fifth—$1,096; 

second-lowest fifth—$2,002; middle fifth—$3,109; second-highest fifth—$4,844.

Source: U.S. Census Bureau, Survey of Income and Program Participation, 1995.

Median Net Worth by Household Income Quintile:1 1995 

(Dollars)

Second-lowest Lowest fifth

fifth

Second-highest Middle fifth

fifth

Highest fifth

116,232

52,860

35,949

21,966

5,000

Figure 4.

Wealth Rises With Age Until Retirement, 

Then Begins to Drop 

Source: U.S. Census Bureau, Survey of Income and Program Participation, 1995.

Median Net Worth by Age of Householder: 1995

(Dollars)

7,428

31,691

61,248

91,330

106,408

97,414

81,600

Under 35 35 to 44 45 to 54 55 to 64 65 to 69 70 to 74 75 and older
4 U.S. Census Bureau

FIRST-CLASS MAIL

POSTAGE & FEES PAID

U.S. Census Bureau

Permit No. G-58

U.S. Department of Commerce

Economics and Statistics Administration

U.S. CENSUS BUREAU

Washington, DC 20233

OFFICIAL BUSINESS

Penalty for Private Use $300

were collected had a median of January 1995; the second rota- report have taken sampling error

household net worth of $33,848. tion group was interviewed in into account and meet the Census

Households with householders March 1995, and their data refer to Bureau’s standards for statistical

having no labor force activity dur- February 1995, and so on. As a re- significance. Nonsampling errors

ing the 4-month period had only sult, the data presented in this re- in surveys may be attributed to a

$11,298. port represent an average of the variety of sources, such as how

assets and liabilities of people at the survey was designed, how reMORE INFORMATION: the end of January, February, spondents interpret questions,

March, and April 1995. how able and willing respondents See, Michael E. Davern and Patricia are to provide correct answers, J. Fisher, “Household Net Worth CONTACTS: and how accurately answers are and Asset Ownership: 1995,” Cur- coded and classified. The Census

rent Population Reports, Series Asset ownership — Bureau employs quality control P70-71. Detailed tables of the Statistical Information Staff procedures throughout the pro- P70-71 report are on the Internet 301-457-3242 duction process — including the (www.census.gov). The data in hhes-info@census.gov overall designing of surveys, test- both this Did You Know report and ing the wording of questions, re- in the P70-71 report were collected This report — viewing the work of interviewers by the Survey of Income and Pro- Sandra Luckett

and coders, and conducting statis- gram Participation (SIPP). The 301-457-3230

tical review of reports. sample of households in the SIPP is sandra.m.luckett@census.gov

divided into four interview groups For further information on statisticalled rotation groups. Each ACCURACY AND cal standards and the computation

month, one of the four rotation RELIABILITY OF THE DATA and use of standard errors, congroups is interviewed about the This report is one of a series that tact Kandasamy Selvavel, Demoprevious 4 months (the reference presents information of current graphic Statistical Methods Diviperiod). The asset and liability policy interest. Statistics from sion, at 301-457-4182,

data in this report were collected sample surveys are subject to sam- kandasamy.selvavel@census.gov.

from the first rotation group in Feb- pling and nonsampling error. All ruary 1995 and refer to the last day comparisons presented in this