Homes or Stocks? US Households Now Lean on Stocks Like Never Before
Equities now account for 39.9% of US household net worth, the largest share in Federal Reserve records.
Owners’ equity in residential real estate fell to 19.3% in the same quarter. The gap between the two measures has widened to 20.6 percentage points.
Stocks Pull Away From Housing on the US Household Balance Sheet
The Kobeissi Letter highlighted the diverging figures, which come from theFed’s quarterly Financial Accounts report. Households held $185.65 trillion in net worth over the period.
Directly and indirectly held corporate equities accounted for $74.03 trillion of that total. Owners’ equity in residential real estate, which is calculated by subtracting mortgage debt from home values, totaled $35.81 trillion.
The divergence traces back to the last bear market. Equity exposure has climbed 12.6 percentage points since the third quarter of 2022. The housing share lost 3.5 points over the same stretch.
Historically, property held the upper hand. Real estate exposure peaked at 24.1% in the third quarter of 2005, one point above equities.
“Household wealth has never been this skewed toward equities,” the Kobeissi Letter said.
US Household Equity Exposure Versus Real Estate Exposure as a Share of Net Worth. Source: X/The Kobeissi Letter
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Home Prices Stalled While the Nasdaq Set Records
Market returns explain most of the shift. The Nasdaq Composite closed at a record 27,122.09 on September 21, a gain of 16.7% for the year.
The S&P 500 finished the same session at 7,764.70, up 13.4% in 2026. Housing, meanwhile, has barely moved.
S&P 500 Performance in 2026. Source: Google Finance
The Case-Shiller national home price index rose 1.5% in the year through June. Inflation ran at 3.5% over the same period, leaving home values lower in real terms for the 13th straight month.
Where the gap goes from here depends on what stocks do next. Forecasts for the rest of the year for the S&P 500 range from 7,400 to 8,100. Six of those targets already sit below Monday’s close, while UBS, Citigroup, Oppenheimer, and HSBC top the range.
According to Reuters, Bank of America holds the lowest target at 7,400. That figure implies a decline of roughly 4.7% from Monday’s close.
The next Financial Accounts release in December will show whether the third quarter widened the gap further.
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