Equities overtake real estate as No. 1 US wealth driver, Goldman says

US equity holdings have surpassed real estate as a share of net household financial wealth for the first time since World War Two, Goldman Sachs said, marking a structural shift in how Americans build and concentrate wealth. The brokerage said equity gains have become the dominant driver of household wealth accumulation and the main contributor to a positive wealth effect on consumer spending.

"Equity gains have been the dominant driver of household wealth accumulation and the main contributor to a positive wealth effect on consumer spending," Goldman Sachs said in a research note published Thursday.

The shift is visible across wealth tiers. Public equity allocations at family offices climbed to 31 percent in 2025, up from 28 percent in 2023, according to Goldman's 2025 Family Office Investment Insights Report. Private real estate and infrastructure allocations stood at just 11 percent, a far cry from the aggressive property accumulation that defined earlier decades of American wealth building. Among older homeowners, housing wealth rebounded to a record $14.92 trillion in the first quarter of 2026, driven by rising home values and mortgage rates falling to their lowest levels since 2022, data from the National Reverse Mortgage Lenders Association show. Senior housing wealth increased by an estimated $314.8 billion, or 1.8 percent, during the quarter, partially offset by a $10.5 billion rise in mortgage debt.

Real estate still matters enormously for middle-income households, where a home often represents the single largest asset. But at higher net worth tiers, equities have pulled decisively ahead. The Federal Reserve's aggressive rate hiking cycle that began in 2022 made mortgages expensive and transaction volumes sluggish, accelerating the relative shift toward equities. Mortgage rates have since retreated to their lowest levels since 2022, temporarily improving housing affordability and supporting home values for older homeowners.

The reordering of household wealth carries implications beyond portfolio construction. With equities now the primary channel for wealth accumulation, consumer spending has become more sensitive to stock market performance — a dynamic that could amplify the economic impact of equity drawdowns. When household wealth is concentrated in equities, those households become more exposed to market corrections. A sharp stock selloff now hits aggregate net worth harder than it would have a decade ago, when real estate provided a larger ballast. The wealth effect from equities tends to be more immediate than from housing, as stock holdings are more liquid and easier to tap for consumption.

Goldman's outlook for 2025-2026 flags increased dispersion within equity markets, suggesting stock-picking skill will matter more as AI-related growth opportunities drive returns. The bank specifically highlighted AI-related growth as a key theme driving equity market returns. For the Federal Reserve, the growing equity wealth effect adds a layer of complexity to rate decisions, as asset price inflation becomes a more direct channel into consumption and aggregate demand. A sustained equity rally could keep consumer spending elevated even as the central bank tries to cool the economy.

The trend also has implications for capital flows. Capital migrating from illiquid, physical assets toward liquid, growth-focused instruments is directionally favorable for risk assets, including digital assets. Real estate could rebound if interest rates come down, Goldman's outlook suggests, but the structural shift toward equities as the primary wealth vehicle appears entrenched for now. The last time such a reordering occurred was in the post-war era of the 1940s and 1950s, when the rise of pension funds and retail brokerage transformed American households from savers to investors — a shift that took decades to reverse.

This article is for informational purposes only and does not constitute investment advice.