US Households Now Favor Stocks Over Homes by Record Margin

Stocks have reached a record 39.9% share of US household net worth, the highest in Federal Reserve data.

Residential real estate equity slipped to 19.3% in the same period, widening the gap between the two to 20.6 percentage points.

Stocks Outpace Housing on US Balance Sheets

The Kobeissi Letter pointed out the contrasting figures from the Fed's quarterly Financial Accounts report. Total household net worth stood at $185.65 trillion during the quarter.

Corporate equities, held directly and indirectly, made up $74.03 trillion of that amount. Homeowners' equity, derived by subtracting mortgage debt from property values, reached $35.81 trillion.

The split began after the previous bear market. Equity exposure has risen 12.6 percentage points since Q3 2022, while housing's share dropped 3.5 points in the same timeframe.

Real estate historically led, peaking at 24.1% in Q3 2005—just one point above equities at that time.

"Household wealth has never been this skewed toward equities," the Kobeissi Letter said.

Home Prices Stagnate as Nasdaq Hits Highs

Market gains largely drive the change. The Nasdaq Composite closed at a record 27,122.09 on September 21, up 16.7% year-to-date.

The S&P 500 ended that day at 7,764.70, a 13.4% advance in 2026. Housing, by contrast, has remained nearly flat.

The Case-Shiller national home price index increased just 1.5% year-over-year in June. With inflation at 3.5%, home values have fallen in real terms for 13 consecutive months.

The future path depends on equity performance. Year-end S&P 500 forecasts vary from 7,400 to 8,100, with six targets below Monday's close. UBS, Citigroup, Oppenheimer, and HSBC sit at the higher end.

Bank of America has the lowest projection at 7,400, implying a drop of roughly 4.7% from Monday's close, per Reuters.

The next Financial Accounts report in December will reveal whether Q3 expanded the gap further.