In The Extraordinary Rise in the Wealth of Older American Households (NBER Working Paper 34131), Edward N. Wolff documents changes in age-wealth profiles in the US between 1983 and 2022. Using data from the Federal Reserve’s Survey of Consumer Finances (SCF), he computes the relative wealth changes for different age groups, focusing primarily on the youngest (under 35) and oldest (75 and over) households.

In 1983, the average wealth of American households headed by someone aged 75 or older was 5 percent greater than the national average; in 2022, it was 55 percent greater. Gains in owner-occupied housing and the stock market, and reduced mortgage debt, were key contributors.

The wealth of households aged 75 and over increased from 5 percent above the overall average in 1983 to 16 percent above it in 2007, then continued to rise to 55 percent above by 2022. Correspondingly, the relative wealth of all other age groups declined during this period. For example, the mean net worth of households under 35 slipped from 21 percent of the overall mean in 1983 to 17 percent in 2007 to 16 percent in 2022.

Wolff identifies three principal factors driving these shifts. First, homeownership rates among the oldest Americans rose by 11.5 percentage points (from 69 to 81 percent) between 1983 and 2022. Meanwhile, younger households saw their homeownership rates remain essentially flat at around 39 percent, falling further behind the overall national average of 66 percent in 2022.

Second, direct and indirect stock holdings—through mutual funds, trusts, IRAs, and 401(k) plans—of households aged 75 and older rose from 56 percent of the overall average in 1989 to 347 percent in 2022.

Third, while debt levels rose in absolute terms across all ages, the ratio of mortgage debt to house value declined for older households, from 21 percent in 1983 to 10 percent in 2010, where it remained through 2022. Meanwhile, for younger households, this ratio rose from 23 percent in 1983 to 76 percent in 2010 before moderating to 57 percent in 2022.

Wolff finds that at least for the latter part of his sample period, 2007 through 2022, educational debt explains only a small fraction of young households’ relative wealth decline.